UNITED STA/^ 
HJSTRlAL COMMISSION, 

HNGTON, D^J 




Glass 

Book, 



> Or a 



PRESENTED BY" 



WEALTH AND PROGRESS 



A CRITICAL EXAMINATION OF 
THE WAGES QUESTION 



BY 

GEORGE GUNTON 

AUTHOR OF PRINCIPLES OF SOCIAL ECONOMICS ; 

THE ECONOMIC AND SOCIAL IMPORTANCE OF THE EIGHT-HOUR MOVEMENT j 

THE ECONOMIC HERESIES OF HENRY GEORGE ; 

THE ECONOMIC AND SOCIAL ASPECTS OF TRUSTS ; 

THE ECONOMIC BASIS OF SOCIALISM 



" No remedies for low wages have the smallest chance of being efficacious 
which do not operate on and through the minds and habits of the people." 

— John Stuart Mill. 



SEVENTH EDITION 



NEW YORK 

D. APPLETON AND COMPANY 

1897 






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Copyright, 1887, 
By D. APPLETON AND COMPANY. 



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TO 

PARKE GODWIN, 

WHO TO A PROFOUND KNOWLEDGE OF ECONOMIC SCIENCE 

ADDS THE BROADEST HUMAN SYMPATHIES, 

THIS BOOK 

IS RESPECTFULLY INSCRIBED 

BY THE AUTHOR. 



PREFACE. 



In submitting this book to the public, duty to the 
dead requires that its origin be told. The central 
thought contained in the following pages and the first 
effort at its statement belongs to Ira Steward, of Bos- 
ton, the history of whose life is the history of the labor 
movement in Massachusetts. For more than twenty 
years he was the real leader and inspirer of the labor 
movement in that State ; and to him, more than to 
any other person, we are indebted for the Massachusetts 
Labor Bureau — the first, and to-day the best, institu- 
tion of its kind in the world. 

He was the pioneer of the short-hour movement in 
this country, and after years devoted to the further- 
ance of its claims, he decided to write what he termed 
" a statement of the labor question." While thus en- 
gaged, the present writer made his acquaintance, from 
which grew a friendship ripening into a complete unity 
of thought and purpose. 

But Mr. Steward's work was not destined to comple- 
tion at his hands. After a protracted illness he died, 
March 13, 1883. When it became evident that he 
could not recover, he made a special request, strongly 
re-enforced by his friends, that I should complete his 
unfinished task. 

In accepting this responsibility, however, it was 
with the expectation that the work was far advanced 
toward completion. But, to my surprise, and that of 



vi PREFA CE. 

his friends, his papers when examined were found to 
consist of disconnected matter, made up of more or 
less extended notes, none of which were in a condi- 
tion to be used. Hence it became necessary for me to 
work out the whole subject anew. 

Accordingly, while the central thought presented in 
this book belongs to Ira Steward, its development and 
presentation is the work of the present writer. By the 
central thought I mean the idea that the standard of liv- 
ing is the basis of wages, and that social opportunity, or 
more leisure for the masses, as expressed in less hoars 
of labor, is the natural means for increasing wages and 
promoting progress. But this thought was not de- 
veloped into any theory of wages or progress, nor was 
it formulated at all ; neither had he collected any his- 
torical or statistical data. Indeed, his contribution 
was conveyed to the writer by verbal statement rather 
than by anything found in his writings. 

I make this explanation here, that Mr. Steward may 
not be held responsible for the defects of my work. 
Whatever there is of value in the original thought I 
reverently lay at his feet, and all the imperfections of 
its presentation I take to myself. 

Although my practical experience with industrial 
affairs has been very extensive, and my opportunities 
for observation have been exceptionally good both 
in Europe and in this country, and although I have 
for twenty years been a close student of economic 
questions, it was not until I undertook this task that 
I began to see the subtlety, complexity, and vastness 
of the industrial problem. 

In order to treat the subject inductively, I made an 
extensive investigation into the rise and development 
of the wages system, and I soon found that the labor 



PREFACE. VU 

question is not a simple detached subject that can be 
arbitrarily settled by statutory enactments fixing 
wages, profits, interest, money, etc., but that it is an 
integral part of the science of social economics ; and 
that all consideration of the subject by English and 
continental writers, as well as American, has hitherto 
failed to recognize the true economic relation the ma- 
terial condition of the masses sustains to industrial 
and social progress ; and also that the question of 
wages has been very superficially and often flippantly 
treated. 

Therefore it became clear to me that no adequate 
treatment of the labor problem is possible without a 
review of the entire question, and in many respects a 
reconstruction of the accepted doctrines of economics. 
This task I found myself logically forced to undertake, 
the results of which I am now ready to submit to the 
public. 

At this point I met with a new difficulty : I have 
what will make a seven or eight hundred page book — ■ 
too large for one volume. But it is naturally divided 
into two parts, both of which are complete regarding 
the subjects to which they relate. One is devoted to 
the much-misunderstood question of wages and its 
economic and practical relation to social reform. The 
other, to a presentation of the principles of social 
economics. It gives me great pleasure to acknowledge 
that it was by the suggestion of Parke Godwin, LL.D., 
1 with whose invaluable assistance and criticism I have 
been favored throughout this work, that I have de- 
cided to publish it in two books in the following order. 

The first— the present volume — deals with the burn- 
ingquestionof the day upon the basis of broadeconomic 
principles and in a direct, practical manner that can be 



viii PREFACE. 

understood and appreciated by the laboring classes. 
In this work I have endeavored to discuss the wages 
problem upon fundamental principles which underlie 
industrial progress, not merely under the wages sys- 
tem, but in all the stages of social evolution. The 
next book will be devoted to the consideration of the 
principles of social economics, including the princi- 
ples of social progress in general, the principles of 
economic production, economic distribution, and the 
principles of practical statesmanship or applied eco- 
nomics. 

New York, October, i88y. 



CONTENTS. 



INTRODUCTION. 

PAGE 

Problem of the hour r 

Poverty more dangerous than formerly. . . . i 

The laborer helpless when discharged 2 

Laborer's social character changed 3 

Poverty dangerous to the wealthy classes 4 

Popular remedies for poverty 5 

True basis for social reform .... 5 

Production and distribution, erroneous views regarding 6 

Economically inseparable 7 

Productive wealth and consumable wealth 7 

Concentration of the former 8 

Implies wide distribution of the latter 9 

High wages induce large production 9 

A chief cause of confusion 10 

The practical problem stated 11 

Object of present work 11 

Outline of Part 1 12 

Outline of Part II 13 

Outline of Part III 14 



PART I. 

Increasing Production : Its Law and Cause. 

CHAPTER I. 

THE RELATION OF LABOR TO PRODUCTION. 

Labor and the creation of wealth 15 

Fallacy of popular idea concerning 16 

Capital not ' ' stored-up labor" labor denned 17 

The perishablenesss of labor 18 



X CONTENTS. 

PAGE 

The laborer's share of the product 19 

Capital does not rob labor, but aids it 20 

Capitals the largest where wages are the highest 21 

Society progresses as human labor is lessened 22 

CHAPTER II. 

INCREASED CONSUMPTION BY THE MASSES THE REAL CAUSE OF 
IMPROVED MACHINERY. 

False view of the employing class 23 

The laborer's prosperity the basis of the capitalist's success 24 

Capital used only when cheaper than labor 25 

Cheaper only when it yields increasing returns 26 

Low wages mean hand labor and dear products 27 

High wages promote the use of machinery and lowers prices. ... 28 

No use for capital in low-wage countries 29 

High wages stimulate the use of machinery in two ways 30 

Arbitrary rise of. real wages impossible 31 

Natural rise of wages always gradual" 31 

Effect of rising wages upon profits 32 

No permanent disadvantage to the employer 33 

Rise of real wages the basis of social progress 34 



PART II. 

The Law of Wages Stated and Historically Estab- 
lished. 

CHAPTER I. 

POPULAR THEORIES OF WAGES CONSIDERED. 

Section I. — The Wages-Fund Theory. 

The doctrine stated 35 

Generally accepted in the United States 36 

It is the doctrine of low wages 37 

Necessary part of the theory that " profits rise as wages fall". ... 37 

Accepted by both laborers and employers 38 

Monopolies, tariffs, and strikes all based upon it 38 

Thornton's attacks and Mill's conversion 39 

Professor Cairnes reaffirms and defends the doctrine 40 



CONTENTS, xi 

PAGE 

Cairnes's defence considered 41 

A learned effort at twisting terms 43 

The theory at best only a truism 44 

Wages not paid from capital 45 

More paid in wages than any wages-fund contains 46 

Wages are paid out of present product 47 

Labor always furnished on credit 48 

The doctrine inadequate if true 49 

Wages not governed by supply and demand ... 50 

The facts all against the theory 51 

The failure of the doctrine . 52 

Section II. — Francis A. Walker s Theory. 

His theory stated 53 

Wages the leavings of rent, interest, and profits 54 

Wages paid before profits and rent 55 

Destroyed by self-contradiction , 56 

Production not the measure of wages 57 

Why production is increased 5S 

Less complete and more inconsistent than the English theory. ... 59 

Section III. — Henry George's Theory. 

His theory stated in his own words 60 

Its logical sequence 61 

Necessary part of his scheme , 62 

Wages always the lowest where land is free 63 

The doctrine everywhere controverted by facts 65 

A delusive presentation of the case 66 

Wages not fixed by the margin of cultivation 67 

Shown by the facts in every industry 68 

The theory historically baseless 69 

Wages nowhere obey Mr. George's so-called law 70 



CHAPTER II. 

WAGES AND THE LAW OF WAGES. 

Section I. — Wages Defined. 

Scientific tests of the true law of wages 71 

Popular definitions of wages 72 

The true definition , , 73 



Xll CONTENTS. 

Section II. — Real and Nominal Wages. 

PAGE 

Real wages and nominal wages denned 74 

Social well-being indicated only by real wages 75 

Section III. — The Economic Lazu of Wages. 

Three industrial states : savagery, slavery, and wages 76 

The similarity of the slavery and wages systems 77 

The difference in the two systems 78 

Labor subject to the law of prices ^ . .. 79 

The economic law of prices 80 

The law of prices illustrated 81 

It fully explains the phenomena 82 

The law of prices applied to labor 83 

The order of economic movement 84 

Arbitrary rise of real wages impossible . 85 

Mr. Brassey's experience in India 86 

Mistaken view of high wages by employing class 87 

Section IV. — Standa7'd of Living. 

Standard of living denned. The family constitutes the basis 88 

The true theory of wages 89 

The ' ' iron law" of wages fallacy 90 

Mistaken view of Lassalle and others regarding 91 

Inversion of economic relations 92 

Wages fixed by the dearest laborers 93 

Why foreigners can save money here and not at home 94 

Using and not saving wealth promotes progress 95 

Section V. — The Cost of Living. 

How the cost of living is determined 96 

Prices affect nominal not real wages 97 

The law as universal as wage-paying conditions 98 

CHAPTER III. 

SIMILARITY OF WAGES IN ASIA AND EUROPE IN THE THIRTEENTH 

CENTURY. 

Standard and cost of living in India 100 

The rate of wages in India 101 

Buchanan and Brassey's experience 102 



CONTENTS. xiii 

PAGE 

Mode of living in China 103 

Wages in India and China eight and ten cents per day 104 

Style of living in Asia and England. 105 

Habitation of English laborer in the thirteenth century 106 

Wages in England nine cents per day 107 

Difference in the progress in England and Asia since 1300 10S 

Both governed by the same law 109 



CHAPTER IV. 

THE RISE OF REAL WAGES IN ENGLAND IN THE FOURTEENTH CENTURY. 

Section L— Why Real Wages Rose after the Famine in 1315-21. 

The first rise of wages in England, errors regarding no 

Inferring facts to sustain a bad theory in 

Supply and demand fail to explain the phenomena 112 

Thorold Rogers's deductions controverted by his own data 113 

Unemployed labor and increased wages not incompatible 113 

The phenomena easily explained by the true theory of wages. 114 

Why wages did not fall with the fall of prices after 1321 115 

Rise of real wages result of social causes 116 

Social power of the free cities 117 

Their influence in obtaining the " Magna Charta" 118 

Change in the laborer's social condition 119 

Effect upon his wants and character 120 

Transformed the rise of nominal into a rise of real wages 120 

Section II. — Black Death not the Real Cause of the Rise of Wages. 

The black death pestilence in 1349 , 121 

Real wages not promoted by famines and pestilence 122 

Failure of the " scarcity of labor" theory 123 

Why wages only rose to fivepence a day in 1350-51 124 

Rise of wages in 1350 due to the same causes as in 1321 125 

Increase of the laborer's wants — chimneys, glass windows, etc. . . 126 

The new demand made higher wages necessary 127 

Efforts of Parliament to prevent the rise of wages 128 

The " Statute of Laborers" 129 

Its failure to stop the rise of wages 130 



xiv CONTENTS. 



CHAPTER V. 

THE RISE OF REAL WAGES ARRESTED BEFORE I450. HOW IT WAS 

BROUGHT ABOUT. 

PAGE 

Statute of laborers not enforced, increased penalties 132 

Statutes of 1360 and 1363 fixing the diet and apparel 133 

Law limiting social mobility, fatal blow to social opportunity .... 135 

The law of 1388 rigidly enforced 136 

Means for cutting off social opportunity completed (1406). ...... 137 

The rise of real wages arrested before 1444 138 

Wages as fixed by the statutes of 1444, 1496-1514 139 

Price of wheat in 1444, 1496-1514 140 

Decline of chartered towns, growth of the open towns 141 

Abolition of the guilds. The act of settlement 142 

True cause overlooked by historians and economists 143 

Blunders of Henry VIII. merely the incident 144 



CHAPTER VI. 

MOVEMENT OF WAGES FROM THE FIFTEENTH TO THE NINETEENTH 

CENTURY. 

Section I. — Why Nominal Wages do not Rise and Fall with the Rise 
and Fall of Prices. 

Rise in nominal but not in real wages 145 

Perishableness of labor. Sellers of, numerous and necessitous. . 146 
Wages move slower than prices. The last to rise or fall 147 

Section II. — Wages and Prices in the Sixteenth Century — Effect 
of Henry VIIl.'s Depreciation of the Currency. 

Necessity of large generalizations 148 

Rogers's pessimism the cause of much error 149 

Comparison of special dates misleading 150 

General averages the only reliable data 151 

Full table of prices and wages 1520-82 152 

Average price of wheat and labor 1520-82 153 

Wages rose twenty-seven and wheat twenty-eight per cent 154 

Wages fixed according to the price of bread — " gallon loaf " the basis 155 

Cost of living the final standard 156 



CONTENTS. xv 

Section III. — Wages and Prices daring the Seventeenth, Eighteenth, 
and Nineteenth Centuries. 

PAGE 

Average price of wheat for the seventeenth century 156 

Rate of wages and price of wheat for the eighteenth century 157 

Dawn of the factory system. Increased social intercourse 159 

Real wages of artisans began to rise again 159 

Why agricultural wages did not rise in the same ratio 160 

CHAPTER VII. 

UNIVERSALITY OF THE LAW OF WAGES. 

SECTION I. — Wages and the Cost of Living in Different Countries. 

Causes that affect the cost of living 162 

Wages higher in large than in small towns. The law universal. . 163 

Trades-union prices unconsciously based upon it 164 

Wages and cost of living in different countries 165 

Wages in different industries. Why vary in the same locality. . . 167 

Section II. — The Income of the Family not Increased by the Wages of 
the Wife and Children. 

The man's wages fall as the earnings of wife and children increase. 168 

Wages of men lower in factories than in other industries 169 

Wage-earners and cost of living in 65 industries compared 170 

Women's wages fixed by the same law 172 

Why they are lower than men's 173 

Wages and cost of living of women 174 

Section III. — The Theory Further Sustained by Dr. Engel's Lata of 

Expenditures. • 

Dr. Engel's law of expenditures stated 175 

Its logical sequence. Wants and wages in different countries... . 176 

Wages the highest where social wants are the largest 177 

The evidence ample and conclusive 178 

CHAPTER VIII. 

wages under piece-work. 

" Piece-work" a delusive expression 179 

" Day-work" wages the basis of " piece-work" prices i8r 



xvi CONTENTS. 

PAGE 

Historical basis of the law 182 

" Piece-work" prices higher in large cities 183 

" Piece-work" prices fall, day wages rise as machinery is improved. 184 

Sliding scale of " piece-work" prices 185 

" Piece-work" prices and " day-work" wages obey the same law. 186 



CHAPTER IX. 

ULTIMATE ANALYSES OF THE LAW OF WAGES. 

Section I. — How the Standard of Living is Determined. 

Standard of living, wants the basis of 187 

Economic wants defined 188 

Man's economic wants the incentive to all productive effort 189 

Production governed by consumption 190 

Section II. — Social Wants, How Dete7'?7iined. 

Man, a twofold being, has physical wants and social wants 190 

The power of habit universal 191 

It affects all classes on all lines 192 

Social influence of custom. Observed by economists 193 

True regulating principle in the law of wages 194 

True test of economic soundness 195 

Section III. — The Influences which Determine Social Character. 

Man's state at birth 195 

His inherent and acquired wants 196 

Internal and external forces — influence of 197 

Easy to do as others do 198 

Social influences irresistible. The power of ostracism 199 

Fixity of habit the guaranty of social permanence 200 

How new wants are created 201 

Social intercourse the basis of new wants 202 

Social wants the basis of character 203 

Social character the basis of wages 203 



CONTENTS. XV11 

PART III. 

Principles and Methods of Social Reform. 
CHAPTER I. 

POPULAR REMEDIES FOR SOCIAL EVILS. 

Section I. — Industrial Progress the Cause not the Consequence of 
Political Freedom. 

PAGE 

Political freedom the effect of industrial progress 205 

Popular inversion of the order of progress 206 

The economic condition of woman 207 

Her social disadvantages the cause of her low wages 208 

Drunkenness a social disease 209 

The saloon competes with the home 210 

The saloon recedes as the home improves 211 

Section II. — Rent, Profit, Tax, and Atoney Reforms. 

Basic error of these reforms 212 

The economic function of money. Scientific basis necessary 213 

Currency reform, not a basic social question 214 

Section III. — Inadequacy of Socialistic Methods. 

The true function of the social philosopher 215 

The mistake of idealizing. Social law the true basis of reform. . . 216 

Socialistic industry impracticable — History of 217 

Profit-sharing enterprises. Godin's and Leclaire's success 218 

If general, it would reduce wages 219 

By same law that children's earnings reduce men's wages 220 

Claims of the State Socialist 221 

The post-office experiment not a financial success 222 

Its successful features not due to State control 223 

Specialists required to conduct complex industries 224 

Public officials seldom experts 225 

Socialistic reforms based upon a mistaken premise 226 

Sound sense of the trades-unionists 227 

Poverty not due to distribution , 228 

Greater production the only remedy for poverty 229 



xviil CONTENTS. 



CHAPTER II. 

HOW TO ENLARGE THE SOCIAL OPPORTUNITIES OF THE MASSES. 

PAGE 

The first question to be settled 230 

Social opportunity defined 231 

The true economic fulcrum 232 

The basic principle of social reform 233 

More leisure for the masses the first condition 234 

Leisure and idleness explained and defined 235 

Enforced idleness dangerous to society , 236 

Helplessness of the discharged laborer 237 

Cause of enforced idleness 239 



CHAPTER III. 

ECONOMIC EFFECT OF REDUCING THE HOURS OF LABOR. 

Section I. — The General Situation Stated and the Line of Opposition 

Indicated. 

Reduction of the hours of labor the first step 240 

Employers' opposition due to inverted economics 241 

The attitude of the press , 242 

Section II. — The Principles zuhich should Govern the Reduction of 
the Hows of Labor. 

Less hours sought for uneconomic reasons 244 

The social basis for reducing the hours of labor 245 

The principle stated 246 

Absurd objections. Recapitulation of the arguments 247 

Principle must be scientifically applied ' 24S 

Section III. — How much can the Hours of Labor be Safely and 
Wisely Reduced? 

Application of the principle under wage-conditions 249 

Hours of labor in different countries 250 

Average working day in those countries 251 

Section IV. — Direct and Immediate Effect of an Eight-Hour System. 

Number working for wages in the United States 252 

Effect of an eight-hour system on enforced idleness 253 

Number of unemployed in the United States (1S86) 254 



CONTENTS. xix 

PAGE 

Unemployed in European countries 255 

Effect upon wages if adopted only in this country 256 

Its adoption in England, France, and Germany also 256 

Number of working children under fifteen years of age. 257 

Its effect on the general market 258 

SECTION V. — The Permanent Economic Effects. 

The permanent effect the important one 259 

The social opportunity eight hours will create 260 

Its influence upon the social character of the masses 260 

Variation in wages — sphere of their oscillations 261 

Influence of less hours upon children 262 

Social effect of half-time schools 263 

High wages and large productions mean low prices 264 

Less hours mean higher wages , 265 



CHAPTER IV. 

THE EFFECT OF AN EIGHT-HOUR LAW UPON PROFITS. 

Evil influence of the popular theory 266 

A plausible error 267 

Fall of wages not a rise of profits 269 

A rise of wages beneficial to all classes 270 

Short hours not injurious to capital 271 

The adoption of the measure should be general 272 

It should be gradual. Duty of employers 273 

CHAPTER V. 

WHAT WOULD BE ITS EFFECT UPON RENT ? 

Rent subject to the same law as profits 274 

Poverty of the poor not due to the wealth of the rich 275 

Military and industrial states of society 276 

Rome an uneconomic state 277 

Rising rents incompatible with falling wages 27S 

High rents always imply high wages 279 

This principle universal 280 

Movement of rent in England since 16S9 281 

Land-owners richer and products cheaper with high wages 282 

Redistribution is not reform. Progress must include all classes . 283 
Less hours beneficial to all classes 284 



XX CONTENTS. 

CHAPTER VI. 

FEASIBILITY OF SHORT-HOUR LEGISLATION. 

Section I. — History of Factory Legislation in England from 
1800 to 1840. 

PAGE 

Short-hour legislation not an untried experiment 285 

England the cradle of the factory system 286 

Condition of factory operatives in 1800 287 

Worked fourteen hours a day and Sundays 288 

The first factory bill in 1802 288 

Opposition of the manufacturers 289 

The use of steam as motive power 290 

It enabled the " masters" to evade the law 291 

Twelve-hour law for all under sixteen years, 1819 292 

Eleven and a half hour law, 1825 — eleven-hour law, 1831 293 

Bitter opposition of employers — their doleful prophecies 294 

Child-labor law of 1835 provided two hours a day schooling 295 

Efforts to repeal the law and counter-movement to extend it 296 

Victory for the operatives in 1839 297 

Section II. — History of the Half-Ti7ne Law of 1844 and the Ten- 
Hour Law of 1847. 

Lord Ashley's leadership in Parliament , 297 

Demand for a ten-hour law. A government compromise in 1843, 298 

Resulted in a half-time school law 299 

Its social and educational influence. Ten-hour bill again pushed. .300 

Increasing opposition of the manufacturers 300 

Bitter opposition of John Bright and Free-traders 301 

Lord Ashley's great speech 302 

The ten-hour bill adopted in 1847 , 303 

CHAPTER VII. 

phenomenal effect of the ten-hour law and half-time 
schools in england. 

Section I. — The Striking Success of these Laws Converted Sir James 
Graham, Mr. Roebuck, and Other Opponents . 

Effect of this opportunity-creating legislation 304 

Improved condition of the laboring classes 305 

Increased wages, improved health, and greater intelligence 306 



CONTENTS. xxi 

PAGE 

Testimony of Chief Factory Inspector Baker 306 

Conversion of Mr. Roebuck 307 

His speech announcing it in the House of Commons 308 

Sir James Graham's conversion 30S 

His candid recantation in Parliament. Mr. Gladstone's testimony. 309 

Its economic soundness admitted by economists 310 

The nine and a half hour law 311 

Section II. — Social Progress Shown by the Rise of Wages, the Fall 

of Prices, and the Diminution of Illiteracy, Pauperism, 

and Crime. 

Social well-being of the masses, how indicated 311 

Percentages not a safe basis for wages comparisons 312 

Rise of wages in England since 1850. Mr. Giffin's estimates 313 

Manchester Chamber of Commerce returns 314 

Leone Levi's estimates 315 

Mulhall's calculations — Average rise since 1850 $2.10 per week . . 316 

Fall of prices since 1850 317 

Progress of intelligence among the masses 318 

Decrease of crime since 1850 319 

Decrease in the consumption of alcoholic drinks 320 

Decrease in the use of beer among the laborers 321 

Decrease of pauperism 323 

The improvement not due to free trade 324 

Its good influence not confined to England 325 

How it prevented the government from siding with the South. . .. 326 

Ten-hour law in Massachusetts 327 

More wages for less hours than in any other State 328 



CHAPTER VIII. 

RELATIVE INDUSTRIAL PROGRESS IN ENGLAND AND OTHER COUNTRIES 
SINCE 1850. 

Section I. — England and Continental Countries Compared. 

How much of England's progress is due to short hours 329 

Actual increase in wages in the various countries 330 

Rise of wages in France and Germany since 1850 331 

Rise of wages in England, France, and Germany compared 332 

Movement of prices in the various countries 333 

Fall greater in England than in other countries 334 



xxn CONTENTS. 

PAGE 

Agricultural wages in different countries 335 

Use of steam, wages, and the cost of labor in various countries. . 336 

Productive power of various nations 337 

Increase of the income per capita in different countries 338 

Superiority of in England 339 

Cost in labor of food, clothes, rent, and taxes in various countries. 340 

Increase in education of children compared 341 

Number of letters sent through mails per capita 341 

Crime in different countries , 342 

Pauperism in various countries 343 

Progress of political freedom 344 

Section II. — Industrial Progress in England and the United States 

Compared. 

Political institutions not proof against poverty 344 

Industrial depressions 345 

Rise of real wages in England and this country 346 

Prices in the United States since 1850 347 

Estimates of Mulhall, Wright, and United States census 34S 

Use of aggregates misleading 349 

Income per capita the only safe basis 350 

Increased earnings per capita in England and America 351 

School attendance in the two countries 352 

Crime in England and America 353 

Growth of political freedom 354 



CHAPTER IX. 

SOCIAL AND POLITICAL NECESSITY OF AN EIGHT-HOUR AND HALF- 
TIME SYSTEM. 

The proposition feasible 355 

Lack of progress not due to our political institutions 355 

Social character the barometer of progress 356 

The wages system favorable to progress 357 

Misconception of the law of wages 35S 

Mistaken industrial policy 3^9 

Its tendency to limit social opportunity 360 

Our foreign population indifferent to education 361 

Children driven into the mills. They miss the common school. . . 362 

The per cent of foreigners in the various occupations 363 



CONTENTS. xxiil 

PAGE 

Seventy per cent of all outside of agriculture 364 

Not opposed to immigration. More social opportunities needed.. 365 

High social character our only protection 366 

Long hours and unwholesome hovels prevent it 366 

The truck system 367 

Operatives' homes indescribable 36S 

Condition as stated in official reports. 369 

Owned by corporations — Operatives compelled to live in them . . 370 

City tenement-houses 371 

Make social and moral development impossible. 372 

Cheap voters furnish an excuse for despotism 373 

Lamentable lack of statesmanship — mainly political quackery... . 374 

Social character must rise, or the Republic will fall 375 

More social opportunity for the masses our only safety 376 

Leisure the basis for social opportunity 376 

Less hours of labor the first step toward leisure 376 

Eight hours and half-time schools a social and political necessity. 377 

Summary and Conclusion 378 



INTRODUCTION. 



By common consent the industrial question has 
become the problem of the hour. There never was a 
time when the demands of the labor question were so 
urgent nor when the failure to adequately meet those 
demands by a scientific solution involved so much 
danger to the well-being and progress of society as it 
does to-day. Not because there is more poverty or 
worse degrees of it in the world than in former times, 
but because it is more intense in kind and dangerous 
in character. 

That the material and social condition of the masses 
has been greatly improved with the progress of soci- 
ety, especially since the phenomenal increase in the 
production of wealth by the use of machinery, no one 
will deny who is acquainted with industrial history, 
notwithstanding the cry raised by those who have 
essayed the task of social reform that " the poor are 
growing poorer," and that the laborer is no better off 
than he was in the middle ages. 

But while it is not true that " the poor are growing 
poorer," nor that the economic condition of the laborer 
is worse than it was in the middle ages or at any pre- 
vious time, it is unquestionably true that poverty is 
more inimical to society to-day, more dangerous to 
social order, freedom, and democratic institutions than 
ever before. 



2 WEALTH AND PROGRESS. 

Nor is the reason for this difficult to understand if 
we remember the changed social condition of the vvork- 
ingman. In the middle ages he was a serf, inseparable 
from the lord's estate ; his wants were few and meagre, 
being practically limited to his physical necessities. 
When he emerged from serfdom into wagedom he 
began to obtain, though slowly, more wealth. His 
wages gradually rose from twopence a day in the 
thirteenth century to five shillings a day in the nine- 
teenth. With this increase in wages has come in- 
creased mobility, larger social opportunities, and con- 
sequently a more highly developed and more sensitive 
character. 

Again, as a necessary part of this industrial differ- 
entiation and social progress he ceased to be a ward 
of his master's household, and became simply a seller 
of service. By this change he gradually became 
a fractional part of a highly complex system of in- 
dustry, in which he is an inseparable and almost auto- 
matic portion of a vast machine, apart from which 
he is practically useless as a producer. Conse- 
quently, when the factory stops or he is discharged, 
from whatever cause, he is utterly helpless to procure 
means for a living, because as an isolated laborer he 
has lost the power to employ himself. When that 
point is reached, which the prevalence of enforced 
idleness shows is painfully frequent, the laborer of to- 
day is not only more helpless but he is more dangerous 
to society than were the laborers of the thirteenth 
century. 

When adversity overtook the mediaeval laborer, 
which was very frequently the case, he had the prod- 
uct of a patch of ground or the " offal from his mas- 
ter's table" — all of which he gave up because he could 



THE MEDIAEVAL AND MODERN LABORER. 3 

obtain more wealth and social freedom by working for 
wages. This has done a thousand times more for him 
than any form of paternal industry could ever have 
done. He has been revolutionized in character, pass- 
ing from a simple life of few wants and necessities to 
a varied and complex one, where he is more sensitive to 
social disadvantages and more sensible of his power as 
a social factor. The product of a little patch of land, 
which would have satisfied all his wants in the thir- 
teenth century, when he lived in a mud hut without 
window, chimney, or furniture, would not now be 
thought of, much less endured, under any circum- 
stances. The social sensibility of the modern laborer 
is such that it would not only be impossible for him to 
accept "offal from his master's table," but he can- 
not, without incurring contempt, accept pauper aid, 
though it be four times as great in amount as the 
maximum mediaeval wages. And to quietly lie down 
and die of starvation he will not, as he ought not to 
do ! He has so far outgrown his faith in the divine 
right of rulers or in the sacredness of the property 
of the " superior classes" that life is more sacred than 
all else. To him no interest, no rights, no class, no 
institutions, and, if the worst comes, even no form of 
government is as sacred as the social demands of his 
family. Unlike his mediaeval ancestors, rather than 
sacrifice the latter he will destroy the former, and, 
Samson-like, pull down the whole structure of society 
in his own fall. This is clearly shown by the readiness 
with which he disregards social usages, legal rights, or 
property interests in inaugurating strikes, industrial 
riots, and social revolutions in order to obtain redress 
for his industrial grievances ; also by the prevalence of 
revolutionary organizations seen in Europe and this 



4 WEALTH AND PROGRESS. 

country, which openly denounce all claims of vested 
interests and the social superiority of any class. 

For these reasons, together with the fact that there 
is vastly more accumulated social wealth in the com- 
munity now than at any previous time, is poverty 
among the laboring classes more dangerous to the in- 
terests of society in general, and to the wealthy classes 
in particular, than ever before. 

Thus it is that while social progress and civilization 
confers almost unlimited advantages, it at the same 
time imposes grave responsibilities. 

It is a fundamental law in all growth that it should 
be symmetrical. The top of anything cannot continue 
to increase in extent and power without the bottom 
being correspondingly strengthened and enlarged. 
So it is with society. No portion of it can con- 
tinuously improve without the progress of the whole. 
Consequently, the increased wealth; opportunity, 
and freedom of the " successful classes" can only 
be permanently secured to them in proportion as the 
poverty of the masses is diminished and their social 
opportunities and freedom are enlarged. The dangers 
that menace society at the top increase exactly in pro- 
portion as the development of the bottom, upon which 
it depends, is neglected. This is demonstrated in the 
history of every arrested, declining, or fallen nation or 
civilization the world ever saw. 

Therefore, how to eliminate poverty is the problem 
which concerns alike the wealthy and laboring classes. 
This can be accomplished in but oneway — viz., by in- 
creasing wealth, and not by taking it from those who 
have and giving to those who have not. It is impos- 
sible to make any important diminution of the poverty 
of the laboring classes, constituting nearly eighty per 



THE TRUE REMEDY FOR POVERTY. 5 

cent of the population, by any redistribution of the 
present wealth, for the reason that there is not now 
nor was there ever enough wealth in existence, how- 
ever divided, to make any appreciable improvement in 
the general condition of the masses. 

Hence the true remedy for poverty is not to be 
found in any scheme for the arbitrary, artificial manipu- 
lation of profits, rents, or taxes, however equitable, 
because at best such an operation would only be a 
transfer and not an increase of wealth. 

Take, for example, Mr. George's plan for abolishing 
poverty by confiscating the rent, which, he says, " swal- 
lows up all the gain" of civilization. When we exam- 
ine the facts we find that the rent from the land in this 
country, if equally divided among the people, would, 
according to the returns for 1880, give about two cents 
a day per head. What would that do toward abolish- 
ing poverty ? Simply nothing. It would only be 
equal to reducing the taxes one half. Any proposition 
• — and this is the most rose-colored one yet heard of — 
which will only increase the wealth of the masses two 
cents a day can hardly be worth the effort as a meas- 
ure for the elimination of poverty. 

The same is true of all schemes for the redistribution 
of present wealth, by whatever means. It is, I repeat, 
to the increase of the total quantity of wealth pro- 
duced, so that the laborer can have vastly more with- 
out anybody having any less, that we must look for 
any permanent and general diminution of poverty. 

The question, therefore, for the social reformer and 
statesman to ask is not how can rents be abolished and 
profits reduced, but how can the aggregate wealth per 
capita of the population be increased? At the very 
outset of the discussion we are brought face to face 



6 WEALTH AND PROGRESS. 

with one of the most important and at the same time 
the least understood questions connected with econom- 
ic science — i.e., the true economic relation that con- 
sumption, which for the masses means wages, sustains 
to production. Production and distribution are gen- 
erally regarded, by both the laboring and employing 
class, not only as distinct, but quite different ques- 
tions ; as though wealth was produced by one set of 
economic forces and distributed by another. Hence 
we find among the workingmen, and especially social 
reformers, that the great complaint is that " there is 
too much concentration of wealth and too little distri- 
bution ;" that existing institutions are " all in the in- 
terest of production and against the distribution of 
wealth ;" that it is not a greater production but a 
more equal or equitable distribution of wealth that is 
needed," etc. 

This view has very naturally given rise to many 
arbitrary schemes for industrial reform, such as the 
abolition of interest, profits, rent, etc., many of which 
would, if undertaken, involve an entire revolution of 
our industrial and social institutions ; while if the true 
relation that distribution sustains to production were 
apprehended and clearly set forth, no such mistaken 
notions would ever obtain. 

Distribution as a distinct economic function has no 
existence apart from production — that is, there is no 
social factor whose normal function is to distribute 
wealth. It is true that wealth is produced by and 
distributed among the various members of the com- 
munity ; but the distinction between production and 
distribution is purely a metaphysical one, existing only 
as a mental concept, while as an actual economic fact 
it has no existence. In a word, economic or industrial 



PRODUCTIVE AND CONSUMABLE WEALTH. 7 

distribution is an inseparable and indispensable part of 
the necessary process of production, and cannot take 
place in any other way (except by charity or theft, 
which is uneconomic). 

For example, the payment of wages is distribution, 
but it takes place only as an investment in production. 
The employer pays wages not to dispense wealth, but 
always to procure more wealth ; therefore, as an em- 
ployer his economic function is not a distributor, but 
a producer, the distribution taking place as an inevi- 
table result of his efforts to produce. And for the same 
reason that there can be no production apart from dis- 
tribution, the latter cannot take place without the 
former.' 55 ' Therefore, to talk of increasing production 
without enhancing distribution, or of increasing dis- 
tribution without at the same time enlarging produc- 
tion is the simplest economic nonsense ; and the no- 
tion so commonly held by socialistic reformers that all 
concentration of wealth is injurious to the social well- 
being of the masses is equally erroneous. 

It should be remembered that there are two kinds 
of wealth — productive wealth and consumable wealth. 
The former consists of that which is devoted to pro- 
duction as capital, while the latter consists of that pro- 
portion of wealth which is capable of directly minister- 
ing to our wants and desires. The former — productive 
wealth or capital — exists mainly in tools and imple- 
ments of production, such as machinery, buildings, 
railroads, ships, etc., and these cannot directly 
minister to our wants ; that is to say, they cannot 
serve us as food, clothes, shelter, etc., but can only 
minister to our needs indirectly by producing those 

* For a full discussion of the relation of consumption to production, 
the reader must be referred to the second volume. 



8 WEALTH AND PROGRESS. 

things which will do so ; therefore, the only possible 
interest the laborer or the community can have in the 
disposition of this class of wealth is that it shall be so 
employed as to give the largest amount of products at 
the least expense to the consumer. If by having 
$100,000,000 capital concentrated in the hands of a 
hundred men devoted to the production of shoes in 
large factories, where as high or higher wages can be 
paid for labor and the shoes given to the consumer for 
ten cents a pair less than would be possible by having 
the same $100,000,000 among a million men with 
small factories, clearly it is to the interest of both the 
laborer and the general community to have this wealth 
concentrated in the hands of the smaller number of 
persons. And this is what is taking place more and 
more in every industry in the civilized world. All 
statistics show that where productive wealth is the 
most concentrated the products are cheapest and most 
abundant. Witness England and America as against 
India and China. 

With consumable wealth, however, the case is just 
the reverse, as this kind of wealth directly ministers to 
man's wants and desires ; the more general its distri- 
bution, the more uniform will be the social well-being 
of all classes of the community. And fortunately for 
civilization all the influences of economic and social 
differentiation conspire against the concentration of 
this kind of wealth. Nobody has any interest in con- 
centrating consumable wealth ; and what nobody has 
any interest in doing will most assuredly never be 
done. 

The only wealth that any class has any interest in 
concentrating is productive wealth (capital). And 
it is one of the divine phases of natural law in eco- 



HIGH WAGES AND LARGE PRODUCTION. 9 

nomics that the concentration of productive wealth 
— which everybody has an interest in promoting — can 
only take place in proportion as the diffusion of con- 
sumable wealth is increased. It is to the interest of 
the most selfish and sordid capitalist, manufacturer, 
merchant, or trader to sell his products. Indeed, it is 
only in proportion as they can thus dispose of their 
consumable w T ealth that they or the community derive 
any benefit from the use of their productive wealth 
(capital). 

Accordingly we find the world over that the produc- 
tion of consumable wealth per capita of the population 
is the greatest and its distribution among the masses 
the most general where productive wealth is the most 
concentrated. 

In this country and in England, where the concen- 
tration of capital is the greatest in the world, the pro- 
ductive capacity per capita is nearly two and a half 
times that of the average in continental countries, five 
times as large as that of Italy, Spain, and Portugal,* 
and twelve times that of China and India ; and the 
income per capitaf is about thirteen times as great as 
that of India and China, six times that of Italy, Spain, 
and Portugal, and more than twice that of the average 
on the European Continent ; and the general rate of 
wages % in England is about ten times that of Asia and 
nearly double that of Continental Europe ; while in 
this country it is about fifteen times that of Asia, and 
within a fraction of three times that of the average on 
the Continent. 

In fact, it maybe laid down as a fundamental law in 

* Mulhall, " History of Prices," pp. 53-55. 
t Ibid., " Progress of the World," p. 42. 
$ Ibid., " History of Prices," p. 126. 



IO WEALTH AND PROGRESS. 

economics that consumable wealth is most abundantly 
produced and most generally and equitably distributed 
among the masses in proportion as the use of productive 
wealth (capital) is concentrated.* 

When this fact is fully recognized by both capitalists 
and laborers, one of the chief causes of confusion and 
misunderstanding in the industrial controversy will 
have been removed. The employing classes will then 
abandon the pernicious notion that low wages are con- 
ducive to large production and high profits, and the 
laborers will forever discard the absurd idea that limit- 
ing production can in any social or permanent sense 
tend to increase distribution. 

It is because production and distribution are insepa- 
rable phases of the same economic movement that 
large production and extensive consumption per capita 
are the universal accompaniments of each other. Wit- 
ness the small production and meagre consumption in 
India and China, and the large production and rela- 
tively varied and extensive consumption per capita in 
England and this country. 

As the diminution of poverty is only possible by a 
greater diffusion of wealth among the masses, and as 
any permanent appreciable increase in the distribution 
of wealth is equally impossible without a larger aggre- 
gate production, the problem is, how to increase the 
wealth per capita, and to enable that increase to find 
its way to the laboring classes. 

The production of wealth, with the exception of the 
little variation in the muscular power of different indi- 
viduals, which is too slight to be considered, is wholly 
a question of tools and implements. The productive 

* For the full statement of this principle, the reader is referred to 
the next volume. 



THE PRACTICAL PROBLEM STATED. n 

capacity of man by hand labor is almost uniform, while 
that with the aid of tools, machinery, etc., varies 
many hundred per cent, according to their extent and 
efficiency : witness the hand-loom and the factory. 
The distribution of wealth, at least so far as regards 
the income of the laboring classes, which is what 
we are concerned with in dealing with poverty, is a 
question only of wages.* Therefore, to the question, 
how can the aggregate wealth per capita be in- 
creased ? the answer is, by increasing the use of machin- 
ery in the process of production. And to the question, 
how can that increase of wealth find its way to the 
laboring classes, the answer is, by increasing real 
wages. 

For all practical purposes, then, the labor problem, 
the problem of diminishing poverty, may be reduced 
to two simple propositions : 

(i) Hoiv can the use of improved methods of produc- 
tion be increased ? 

(2) How can the general rate of real wages be perma- 
nently advanced ? 

To answer these two questions and thereby show 
how real wages can be permanently increased and 
poverty diminished without lessening the income of 
the profit and rent-receiving classes is the purpose of 
the following pages. 

In order to simplify the treatment of the subject, we 
have divided it into three parts, as follows : 

Part I. Increasing Production : Its Law and Cause. 

Part II. The Law of Wages Theoretically Stated 
and Historically Established. 

* For a full statement of what constitutes wages, see Chapter II., 
Part II. The question of rent and profit will be discussed in the next 
volume. 



12 WEALTH AND PROGRESS. 

Part III. Principles and Methods of True Social 
Reform. 

Although these parts each sustain a logical relation 
to the whole, they are sufficiently monographic in 
character to admit of being considered independent of 
each other. Hence, while I should prefer that they 
were read in the order in which they are presented, 
the sense would not be seriously affected were any 
other course adopted. 

But while this is true of the parts, it is far from be- 
ing true of the chapters in each part. Part I. is de- 
voted to production. It consists of two chapters, the 
first of which treats of the relation human labor, per 
se, sustains to production. The socialistic postulate 
that " labor is the creator of all wealth"* is shown to 
be incorrect in fact and inimical to true labor reform. 
In the second chapter the economic importance of 
high wages in promoting the use of improved machin- 
ery is considered. The capitalistic postulate that the 
wages and even employment of the laborer primarily 
depend upon the prosperity of the employer is shown 
to be an inversion of economic relations. It is demon- 
strated that the extensive use of machinery and the 
success of the profit receiving class finally depend 
upon the prosperity of the wage-receiving masses. 
Neither of these chapters can be properly understood 
without reading the other. 

Part II. is exclusively devoted to the subject of 
wages, and it comprises nine chapters. The first is 
devoted to a critical examination of the popular theo- 
ries of wages. The second is devoted to a presenta- 
tion of our own theory of the law of wages. So far as 

* Platform of Socialistic Labor Party, 1S85. 



THE PLAN OF THE BOOK OUTLINED. 13 

the theoretic treatment of the subject is concerned, 
this chapter may be regarded as approximately com- 
plete. The succeeding five chapters are devoted to an 
historical review of the movement of wages in different 
countries and industries from the thirteenth century to 
the present time. The dawn of wages in the thir- 
teenth century, their marked rise in the fourteenth, 
their arrest in the fifteenth, their stationary condition 
during the sixteenth, seventeenth, and eighteenth, and 
their phenomenal rise in the nineteenth century, in the 
light of this theory, all become easily explainable. It 
also affords an adequate explanation of why the rate 
of wages in the same industries vary in different coun- 
tries, and vary in the different industries in the same 
countries ; why they are higher in large cities than in 
smaller towns ; why, the world over, they are lower in 
agricultural than in manufacturing and commercial in- 
dustries, and why the wages of women are universally 
lower than those of men. » 

The eighth chapter treats of wages under piece-work, 
and the last one is devoted to an ultimate analysis of 
the law of wages. 

It is true that we have devoted considerable space to 
the question of wages. We have been induced to do 
so for two reasons : (1) Because it constitutes the very 
kernel of the social problem, which can never be solved 
until the wages question is philosophically settled, and 
(2) because it has never received the comprehensive 
scientific treatment it is entitled to. 

Part III., which comprises nine chapters, is devoted 
to the consideration of practical propositions for in- 
dustrial reform. As to the means for inaugurating the 
industrial reform which shall, through the natural 
operation of social and economic forces, tend to increase 



14 WEALTH AND PROGRESS. 

wages without reducing profits or abolishing rents, it 
is not necessary to say anything here. In closing, 
however, I may say that every step in that direction 
has been taken upon a strictly scientific basis. No 
proposition is suggested which is not based upon 
sound economic principles and the absolute feasibility 
of which has not been fully demonstrated by ex- 
perience. 



WEALTH AND PROGRESS. 



PART I. 

INCREASING PRODUCTION : ITS LAW AND CAUSE. 



CHAPTER I. 

THE RELATION OF LABOR TO PRODUCTION. 

The idea most prevalent, indeed, well-nigh uni- 
versal, among workingmen regarding the production 
of wealth, to use the official language of the largest 
labor organization in the world,* is : " (i) That labor 
creates all wealth. (2) That all wealth belongs to those 
who create it." From this it manifestly follows, " that 
all wealth rightfully belongs to the laborer." Hence, all 
who obtain wealth without his consent do so by cheat- 
ing him out of the product of his labor, and are ' ' thieves 
and robbers." 

This is not merely the official dogma of a single so- 
ciety, but it constitutes the basis of nearly every propo- 
sition and the essence of nearly all economic literature 
put forth in the name of industrial and social reform. 
With financial reformers the robbery is labelled " in- 
terest and usury ;" with land reformers it is " rent," 
and with the socialists, in the language of their own 
economist, Karl Marx, it is " surplus value," which is 

* "Polity of the Labor Movement," Vol. I., p. 4, published by the 
Knights of Labor, 1885. 



1 6 WEALTH AND PROGRESS. 

more sweeping than any of the others, and includes all 
rents, profits, and interest. 

If this formula is correct, and all profits, interest, 
rents, etc., are " exploitation" — mere plunder of the 
laborer — clearly the workingmen would be justified in 
using any means within their power to take possession 
of all the wealth in the community, as many of their 
leaders are expecting them some day to do. 

But is it correct ? If the first proposition is true, the 
balance of the formula is indisputable ; but if it is not 
true, then the whole fabric falls, and all efforts at social 
reformation based upon it must surely fail to produce 
the desired and expected result. 

A very little reflection will suffice to show that this 
proposition, while seemingly true, is essentially false. 
There unquestionably was a time in the history of man 
when all wealth was produced by human labor. When 
man lived on wild berries or such fish and game as he 
could procure with his own hands, then wealth was all 
produced by labor ; and it may be added that he then 
got not only all the wealth he produced, but all that 
was produced. There was then no landlord, capitalist, 
employer, or politician to take it from him in rent, 
profits, interest, or taxes. He then both produced all 
and received all, and it should be remembered that he 
then got the least, and was literally the poorest he ever 
was in the world. From that time to this, just in pro- 
portion as he has learned to substitute other forces for 
human labor in production has the amount of wealth 
he received increased. Indeed, that is the only con- 
dition upon which he would ever consent to change his 
methods of doing. 

Now, suppose the primitive hunter was able by his 
unaided efforts to procure, on an average, 300 pounds 



CAPITAL NOT " STORED-UP LABOR." 17 

of game a year, and by devoting two months in the 
year to making bows and arrows he could with their 
aid, during the remaining ten months, obtain 400 
pounds of game, would the whole 400 pounds be the 
product of the man's labor ? Certainly not. The pro- 
ductive capacity of the man had already been fully 
tested, and he could only procure 300 pounds a year. 
The other 100 pounds was, therefore, clearly due to 
the bow and arrow, which in this case was capital. It 
may be said that the bow and arrow could not have 
caught the extra 100 pounds of game without the la- 
borer ; true, nor could the laborer have caught it with- 
out the bow and arrow, as experience had shown. In 
fact, that was the only reason he was willing to devote 
two months a year to making bows and arrows. If he 
could have procured no more game in the same time 
with than without the capital, he would have refused 
to use it. In a word, it is simply because the bow and 
arrow, in addition to reimbursing him for the two 
months' labor he has bestowed upon it, makes him 
a clean present of 100 pounds of game a year, that he 
is willing to employ it. 

Oh, no, says 'some one, the bow and arrow (capital) 
gives him nothing ; it is simply his own labor in another 
form. In short, "capital is stored-up labor." Ah! 
there is where the error begins. That is a metaphysi- 
cal expression which is a great deal used, and it is 
very misleading. 

What is labor ? It is simply human force or energy. 
Now, human energy cannot be " stored up" in any- 
thing but a human being, and only to a very limited 
extent there. A healthy person would not be enabled 
to put forth twice as much energy and skill per day 
during the last half of the year because he had been 



1 8 WEALTH AND PROGRESS. 

idle the first half. It is because of the laborer's in- 
ability to " store up" his labor — and if he fails to sell 
to-day's energy to-day it is lost forever — that enforced 
idleness has such terrors for him. 

But to " store up" human force in anything else than 
a human being is absolutely impossible. When human 
energy is devoted to any object it is expended, and as 
human force it is gone forever. If it is wisely directed 
it will produce wealth ; if not it will be wasted. 
If it produces wealth in the form of a bow and arrow, 
the bow and arrow is not labor ; it is the product of 
labor. It is a new thing that has come into existence 
as the result of human energy having been expended 
upon material objects. The bow and arrow are as dis- 
tinct and as different from human labor as cotton 
cloth is from a weaver, or as a rose is from a dunghill. 

But assuming for the moment that human labor or 
force can be " stored up" in material objects, no one 
will hardly pretend that it can be engendered by them. 
Therefore, the most that can be claimed by the " stor- 
ing-up" theory is that the amount of human energy 
expended in producing an object is transferred to and 
preserved in that object. 

Now, if two months' human force was deposited in 
bows and arrows, then only two months' human energy 
could be put forth by the bows and arrows ; and if two 
months were expended on bows and arrows, only ten 
could be devoted to hunting. We have seen that, un- 
aided, the laborer could only obtain 25 pounds of game 
a month ; hence, in ten months he could only pro- 
cure 250 pounds ; but with the combined force 
of labor and the bows and arrows he could get 400 
pounds. The whole of the additional 150 pounds, 
however, was not due to the bows and arrows. There 



THE LABORER' S SHARE OF THE PRODUCT. 19 

were two months' labor deposited in them, and that 
represented fifty pounds of game, making 300 pounds 
as the result of the human force and 100 pounds pro- 
duced by the natural forces combined in the bows and 
arrows. Thus, whichever way we consider it, the ad- 
ditional 100 pounds of game was produced by capital 
and not by labor. 

But let us carry our illustration a little further, and 
suppose another person who has an aptitude for mak- 
ing bows and arrows can make a better kind of weapon, 
one that will kill at a greater distance, and thus enable 
the hunter to obtain fifty pounds of game a month. 
He comes to our hunter and says, See here, I can make 
better bows and arrows than you can, and you can 
hunt better than I can. Now if you will give me one 
fourth of the game you catch, I will supply you with 
these superior bows and arrows, by which you can get 
600 pounds of game a year. He accepts the offer, and 
the result is that, after giving to the man who supplies 
the capital (bows and arrows) one-fourth of the prod- 
uct, he has 450 pounds. 

Now, who has been robbed ? Nobody. True, the 
laborer once got all the wealth, and he now only gets 
three-fourths ; but when he got it all he received fifty 
per cent less than when he only gets three-fourths of 
it. And this for the simple reason that the total prod- 
uct had been doubled. Nor is this increased product 
due to any increased expenditure of labor. There was 
no more human effort put forth to produce the 600 
than was devoted to that of the 300 pounds of game. 
The increase was wholly due to the use of tools 
(capital). 

When the wealth was all produced by human effort 
the laborer received it all, and got 300 pounds of game 



20 WEALTH AND PROGRESS. 

a year. When he produced a little less than two-thirds 
of it he received five-sixths, and then got 400 pounds. 
And when he produced only one-half he got three- 
fourths of it, and then received 450 pounds a year. 
Thus it will be seen that instead of the laborer being 
robbed by capital he from the first received a clear 
contribution from capital, which constantly increases 
as its use in the production is extended. 

Now, this is just what takes place in all productive 
enterprises, no matter how subtle and complex the 
operation may be. There are thus clearly two sets of 
forces or two kinds of motor power that can be em- 
ployed in producing wealth. One is labor power en- 
gendered and put forth by human beings ; the other is 
natural power engendered and put forth by material 
objects, as capital (machinery, etc.). The former is 
slow, clumsy, and ineffectual, and capable of very lit- 
tle increase, while the latter is rapid, exact, and pow- 
erful, and is capable of indefinite increase. 

Accordingly, in proportion as wealth is produced by 
human labor is it scant and dear, and the masses are 
poor and barbarous ; and according as it is produced 
by natural forces (steam, etc.) it is abundant and 
cheap, and the masses are materially prosperous and 
socially civilized. Thus, e.g., in India, where wealth 
is produced mainly by human labor, the annual earn- 
ings are about £2 ($10)* per capita of the population 
as against £33 ($165) per capita in this country, where 
human labor supplies the smallest per cent of the pro- 
ductive power of any country in the world. f The 
same is true of other countries. 



* See Mulhall's " Progress of the World," p. 42. 
f Ibid., " History of Prices," p. 53. 



HIGH WAGES AND LARGE CAPITALS. 21 

Hence we find that in England over seventy-eight 
per cent of the productive power is furnished by steam, 
as against ten per cent in Russia. In Spain, twenty. 
four ; Italy, thirty-four, and Portugal, forty-two per 
cent of the productive power is furnished by human 
labor, as against four per cent in England and America. 

In consequence of this difference in the use of 
natural and human forces in production, Mulhall tells 
us * " that the united industrial power of six English- 
men and six Americans is equal to that of twenty-four 
Frenchmen or Germans, thirty-two Austrians, fifty 
Spaniards, seventy five Italians, or eighty-four Portu- 
guese. ' ' Accordingly we find the general rate of wages 
in England is nearly twice and in this country three 
times that of the average in continental countries. 

It is thus clear that the laborer is not robbed by 
capital, but that he always gains by the use of capital, 
not because of any generosity on the part of the capi- 
talist, but by the inexorable operation of economic 
law, which prohibits the use of capital except upon the 
condition that it will yield increasing returns— in 
other words, that it will give more wealth to the com- 
munity than it takes from it. 

Were this otherwise, social progress would be im- 
possible, as the productive power of the human hand 
cannot, to any great extent, be increased. Hence, 
unless some other forces can be harnessed to the pro- 
duction of wealth, man would be doomed to eternal 
poverty and barbarism, as he has been for ages in 
those countries where natural forces (machinery) have 
not — except to the most limited extent — been em- 
ployed. In short, it is only as capital produces more 
than it consumes that the laborer is enabled to con- 
* " History of Prices," p. 54. 



22 WEALTH AND PROGRESS. 

sume more than he produces, and social progress be- 
comes possible. 

It is therefore clear that human labor does not, ex- 
cept under the most primitive state of savagery, " create 
all wealth," and that the social condition of the laborer 
is not necessarily the best when he gets the whole prod- 
uct ; but, on the contrary, wealth is produced by the 
combined effort of labor and capital, and that, accord- 
ing as the proportion of the total wealth produced by 
human labor diminishes, the actual amount the laborer 
receives increases. In other words, the social well- 
being improves in proportion as nature, instead of 
man, is made to do the work of producing the world's 
wealth. 

This brings us to the question, How is the use of 
natural or labor-saving forces in production deter- 
mined ? which will be the subject of the next chapter. 



CHAPTER II. 

INCREASED CONSUMPTION BY THE MASSES THE REAL 
CAUSE OF IMPROVED MACHINERY. 

What we have said in the last chapter aboi.t the 
mistaken notions entertained by the laborers regarding 
their economic relation to production, the employing 
class will be quick to appreciate. They have no diffi- 
culty in seeing that the extensive use of capital is in- 
dispensable to a large production of wealth. Nor are 
they at all slow to observe the fact that rising wages 
and falling prices accompany the extensive use of 
labor-saving methods of production. But when we 
come to question of how the use of improved machin- 
ery is determined, we find that the capitalists as a class 
are very little better informed as to their economic re- 
lation to production than are the unlettered laborers. 
They almost invariably assume and very often offen- 
sively insist that the use of machinery is due to their 
self-denial and sagacity. They hold it is because they 
have been willing to forego the luxuries others en- 
joy, and had the wisdom to invest their capital in 
improved machinery, that laborers are enabled to have 
higher wages, consumers lower prices, and social prog- 
ress has been made possible. 

With such an inflated estimate of his own impor- 
tance, backed by economic lore, it is not surprising that 
the average employer should regard the laborer as an 
ungrateful wretch when he asks for higher wages, and, 



24 WEALTH AND PROGRESS. 

as is often the case, remind him that it is only by the 
employer's sacrifice and forethought that he has hith- 
erto been enabled to receive any wages at all. 

A little closer consideration of the subject, however, 
will show that this view is as erroneous as is that of 
the laborer, who assumes that he is the sole producer 
of wealth. We shall find that instead of the laborer's 
higher wages and improved social condition being the 
result of the employer's investment in machinery, the 
case is just the reverse — viz., that the successful invest- 
ment of capital in machinery is made possible only 
by the increased consumption (higher wages) of the 
masses.* Nor is the reason for this difficult to under- 
stand. The fact that man endeavors to satisfy his 
wants with the minimum effort is as universal as the 
human race. Hence, as there are two sets of forces, 
human and natural (labor and capital), by which wealth 
can be produced, he will naturally use that force which 
will, under the circumstances, enable him to obtain 
wealth the easiest. If the primitive hunter could pro- 
cure as much game and defend himself against attack 
as well without as with the bow and arrow or other im- 
plement, he would not devote any time to making such 
implements, for the obvious reason that nothing would 
be gained by so doing. 

Upon the same principle, in a highly complex soci- 
ety, where wealth is mostly obtained by exchange, 
man will use those things which, other things being 
the same, he can obtain the cheapest. Hence, the 
use of that which undersells will always supplant that 
which is undersold. Consequently, just as fast as any 
commodity can be undersold will the methods by 

* Brassey's " Work and Wages," ch. v. 



THE BASIS OF INCREASING RETURNS. 25 

which it is produced be driven into disuse. Therefore, 
whether at any given time or place, labor (human force) 
or capital (natural forces, machinery, etc.) is most 
extensively used in the production of wealth will de- 
pend upon which of them can produce wealth the 
cheapest. 

It will thus be seen that capital becomes a factor in 
production only in proportion as it is able to produce 
wealth cheaper than it can be produced by human 
labor. For the same reason that a man will not de- 
vote his labor to production except he can obtain 
wealth by so doing, will he refuse to devote the prod- 
ucts of his labor (capital) to production except he can 
thereby gain something. Then, as neither the com- 
munity will use nor the capitalist furnish improved 
methods of production unless both can obtain more 
wealth for the same exertion by the undertaking, cap- 
ital can be permanently employed in production only 
when it yields more than it costs. In other words, the 
permanent use of improved machinery is possible only 
under conditions of increasing returns. 

By increasing returns we mean the conditions under 
which the application of additional capital to pro- 
duction will yield more than a proportional increase 
of product, which is illustrated in the history of every 
successful enterprise. Thus, e.g. , in the cotton indus- 
try in this country, in 183 1, there was $651 of capital 
invested to each operative employed in the manufac- 
ture of cotton cloth. The annual product in finished 
cloth was 956.70 pounds per operative, or 1.46 pounds 
per dollar invested. In 1880 the capital invested in 
the business was $1207 per operative, and the annual 
product was 3519.47 pounds of cloth per operative, or 
2.91 pounds per dollar invested ; thus showing that 



26 WEALTH AND PROGRESS. 

with an investment in improved machinery of $1207 
per operative in 1880, each dollar produced ninety-nine 
per cent more cloth than it did in 1831, when only 
$651 per operative were so invested. By this increas- 
ing return the laborer could have higher wages, the 
consumer have the goods at lower prices, and the em- 
ployer could have a larger aggregate income at even a 
smaller rate of profit. This is what the history of the 
present century shows* has taken place wherever in- 
creasing returns were possible. 

To make natural forces cheaper than human labor as 
a productive power is to make wealth and civilization 
cheaper for everybody than poverty and barbarism. 
Therefore, how to make increasing returns to capital, 
and hence the general use of machinery possible, is 
primarily to solve the social or poverty problem. 
What, then, are the social conditions necessary to 
make increasing returns and the use of natural force 
in production economically possible ? 

To begin with, natural forces can only be har- 
nessed to production by the use of capital. For the 
same reason that the laborer will not devote his labor 
to production without some reward, the owner of 
wealth will not devote it to production as capital un- 
less he can gain something thereby. In order to ac- 
complish this he must do one of three things — viz., 
either give the laborer less, charge the consumer 
more for his products, or produce a larger amount in 
the same time. The first is impossible, because the 
laborer will refuse to work for less than he could get 

* Carroll D. Wright estimates (1880) that wages in the cotton indus- 
try in this country have about doubled since 1828. Since 1826 the 
price of heavy sheetings has been reduced from 13 to 7^- cents a 
yard, and that of printed calicoes from 22 to 7 cents a yard. 



CHEAP LABOR MEANS DEAR PRODUCTS. 27 

by hand labor ; the second is equally so, because the 
consumers will refuse to buy at a higher price than the 
hand laborer will sell at ; therefore, the third condi- 
tion — viz., to produce more in the same time — is the 
only one upon which the owner of capital can gain 
anything by the transaction, and consequently the 
only one upon which he will consent to invest his cap- 
ital in machinery. 

Whatever will do this will actually yield increasing 
returns, and lessen the cost of producing wealth. But 
there is one other condition that is necessary to make 
it economically and socially a success. That is that 
the increased product must all be sold. If it cannot 
be sold it is socially wasted. Wealth that is not con- 
sumed in the gratification of human wants is econom- 
ically as if it had not been produced. 

In order to illustrate the operation of this principle, 
let us suppose that in a given community the con- 
sumption of fish is 100 pounds a day. To obtain this 
amount of fish required the labor of ten men, at $1 a 
day each. At that rate the fish would cost ten cents 
per pound. Let us further suppose that by the use 
of boats, nets, etc., instead of fish-hooks, the same men 
could catch 300 pounds of fish per day. We will also 
suppose that the boats, etc., would last two years, and 
would require the labor of four men one year to make 
them. That would be equal to constantly employing 
two men in producing boats, nets, etc. By thus de- 
voting the product of two men's labor to making tools 
they would be able to increase their production of fish 
200 per cent. By this means, provided the product 
could all be sold, the cost of the fish would be reduced 
from ten to four cents per pound. But suppose only 
200 pounds of the fish were consumed. As the cost 



28 WEALTH AND PROGRESS. 

of producing the whole 300 pounds would have to be 
defrayed out of the income from that portion which was 
sold — the balance being as if it had not been produced 
— obviously the 200 pounds consumed would have to 
be sold at six cents a pound. And for the same reason 
if only the original 100 pounds were consumed they 
would cost twelve cents a pound. 

It will thus be seen that if the consumption of fish 
had remained stationary, the small demand of 100 
pounds per day could have been supplied at two cents 
a pound cheaper by the old method than by the new ; 
while if the consumption had grown to 200 pounds a 
day, by investing as much capital in boats, nets, etc., 
as would pay for the labor of two men, the product of 
fish would be doubled, and the cost to the consumer 
reduced forty per cent. And if the consumption had 
risen to 300 pounds a day, the same investment of cap- 
ital would have trebled the product, and reduced the 
price of the fish sixty per cent. It will thus be seen 
that with the small consumption (low wages) the prod- 
ucts of hand labor were cheaper than those of natural 
forces (tools) ; and in proportion as consumption en- 
larged (wages rose) increasing returns for the use of 
capital became possible, and consequently the products 
of natural forces (boats, nets, etc.) became cheaper 
than those of hand labor. Manifestly, therefore, the 
social utility and hence the economic possibility of 
adopting improved methods of production finally de- 
pends upon the increased consumption of wealth by 
the community — by the masses — which, in modern so- 
ciety, means increasing zvages. 

Therefore, instead of the increased wages and im- 
proved social condition of the laboring classes being 
in any true sense due to the " sacrifice" and wisdom 



DEAR LABOR PROMOTES MACHINERY. 29 

of the employing class, by investing their capital in 
machinery, the successful use of capital to any consid- 
erable extent, and hence the income of the entrepreneur 
class, ultimately depends upon increasing the economic 
capacity of the masses to consume wealth — i.e., the rise 
of real wages. 

Accordingly, we find that among the American Ind- 
ians, Esquimaux, Patagonians, and other barbarian 
tribes there is practically no use for the employing and 
capitalist class. They cannot get a living among those 
people, and why ? Simply because the consumption 
of wealth per capita is so small that they can supply 
their wants with hand labor or by means of the rudest 
tools cheaper than with modern machinery. And in 
India and China, where the consumption per capita is 
a little larger, the chance for the entrepreneur class to 
obtain a living is a little better. It is a little better 
still in Russia, Austria, Italy, and Spain, where wages 
are higher ; still better in France and Germany, and 
best of all in England and the United States, where 
the wages and consumption per capita are the largest 
in the world.* 

* According to Mulhall, in India, with wages at 60 to 70 cents a 
week, the capital invested in production is only about $35 per head 
of the population. In Russia, with wages at $3.60 per week, it is 
$190 per capita. In Austria, Italy, Spain, and Portugal, with wages 
at $3.76, it is about $350 per capita. In Germany, with wages at $3.84, 
it is $540 per capita. In France, with wages at about $5, the capital 
invested is about $1010 per capita, and in England, with wages at 
$7.74 per week, it is $1300 per capita. Accordingly, in England 
78.16 per cent of the products are made by steam as against 10 per 
cent in Russia, 29 per cent in Austria, 34 per cent in Italy, Portugal, 
and Scandinavia, and 36 per cent in all Continental countries. And 
in England and America 4^ per cent of the product is made by hand 
labor as against 23.19 per cent in Spain, 33.67 per cent in Italy, and 
42.37 per cent in Portugal. 



30 WEALTH AND PROGRESS. 

An increase in the general rate of wages tends to in- 
fluence the use of improved methods of production in 
two ways simultaneously. It not only makes improved 
machinery possible through a larger consumption, but 
at the same time, through its tendency to increase the 
cost of labor, it makes the use of machinery necessary 
in order to reduce the price as well as increase the 
quantity of wealth produced. 

This fact has been partially recognized, but its eco- 
nomic importance has never been fully understood. 
Economists have fully recognized the economic advan- 
tage of improved machinery and extensive markets, 
but they have utterly failed to recognize the necessity 
of high wages as a means to that end. Adam Smith 
clearly saw that the division of labor and the use of 
machinery are " limited by the extent of the market ;" 
but neither he nor any of the able writers who followed 
him appear to have perceived the more important 
double fact — viz. : (i) that the extent of the market is 
mainly determined by the consumption of the labor- 
ing class, who it is estimated consume about eighty 
per cent of the machine-made products of the world, 
and (2) that it is only in proportion as real wages rise 
and labor becomes dear that it is worth saving, and the 
use of cheaper methods (machinery) becomes an eco- 
nomic necessity. 

This partial view is largely due to the mistake of 
constantly regarding the laborer as only a factor in 
production and ignoring him as an element in con- 
sumption, and consequently viewing wages as an ex- 
penditure, as a cost that should be reduced, instead of 
regarding them as an element of demand and a purchas- 
ing force in the market, which should be steadily 
increased. This fact once thoroughly understood by 



ECONOMIC EFFECT OF RAISING WAGES. 31 

the employing class they would soon radically change 
their attitude toward the labor movement. They 
would then see that their economic interest and pros- 
perity is finally identified with rising and not with fall- 
ing or even stationary wages. 

Although it is not possible for employers, as such, to 
arbitrarily raise wages, they would then see that it is 
alike to their interest and their duty to use all their 
social and political influence in promoting instead of 
retarding the free operation of the economic and social 
forces, which tend to naturally, and therefore gradually 
and permanently, increase the general rate of wages. 

It should always be remembered that a general 
rise of real wages can never be brought about by any 
arbitrary and artificial means ; but, as we shall hereafter 
see, it is always due to the unconscious operation of 
social influences. Hence the movement, when natural, 
is always subtle, complex, and very gradual. Conse- 
quently, it never injuriously disturbs the economic re- 
lations of any class in the community. 

Although the upward movement of wages is always 
subtle and composite, taking place in almost in- 
sensible gradations, it is none the less positive and 
aggressive. The first economic effect arising from 
the laborer demanding more wages is to increase the 
pressure upon the employer's profits or the capitalist's 
interest. The manufacturer, endeavoring to move in 
the direction of the least resistance, at once tries to 
avoid this pressure bypassing it on to the consumer in 
the form of higher prices, and the consumer, acting 
upon the same principle, endeavors to resist the 
higher prices by refusing to purchase or by buying a 
smaller quantity of the products. Thus, what the 
manufacturer gains by increased prices he loses by de- 



32 WEALTH AND PROGRESS. 

creased sales. On the other hand, if the employer at- 
tempts to resist the upward tendency of wages he is 
met by the stoppage of his works, which involves an 
economic loss and a social disturbance, which is always 
very disagreeable and often ruinous, and will only be 
encountered as a last resort. Ultimately, therefore, 
the employer is compelled to choose between the use 
of an improved process of production, by which his 
commodities can be made cheaper, or the lowering 
and perhaps the loss of his profits. 

The latter, involving as it does his own impoverish- 
ment, is naturally the last thing he will consent to do ; 
consequently, in obedience to the same law of self- 
interest which impelled the laborer to demand higher 
wages and the community to refuse to pay higher 
prices, he turns for relief to the use of improved 
machinery* as a means of production. 

This result having been reached by the constant, 
gradual, and almost insensible action and reaction of 
social influence, he does it not with any conscious re- 
luctance, as a desperate last resort to escape ruin, but 
rather as an agreeable act of economic strategy, in the 
laudable endeavor to improve his condition by moving 
in the direction of the least resistance. 

.By doing this he unconsciously avoids all the dan- 
gers that would beset him in other directions. As in 
the case of the fisherman in our illustration, by invest- 
ing as much capital in improved tools and implements 
as he previously paid in wages to one-fourth of his 

* Or to a more extensive use of the present machinery, such as a 
larger factory, etc., by which means he can produce the same amount 
with less waste, less cost in superintendence, less cost in motive 
power, etc., which has the same influence on the cost of production 
as improved machinery. 



HIGH WAGES THE BASIS OF LOW PRICES. 33 

laborers, he is enabled to produce the same amount at 
a much less cost. By this means he is not only able 
to comply with the demand of the laborers for higher 
wages without any diminution of his profits, but he is 
also enabled to greatly reduce instead of increase the 
price of the commodities. 

This enables him to sell the products at a lower 
price and puts them within reach of another large class 
who were unable to consume them before, thereby 
greatly extending the market, thus enlarging his in- 
come without raising the rate of profits, and at the 
same time increasing the demand for labor. 

This is the way all improved methods of production 
have come into existence. It was upon this principle 
that, as an instrument of production, the plough be- 
came cheaper than the spade, the mowing-machine 
cheaper than the scythe, the factory cheaper than the 
hand-loom and spinning-wheel, the sewing-machine 
cheaper than the needle, the ocean steamer cheaper 
than the sailing vessel, and the railroad cheaper than 
the stage-coach. And it was upon the same principle 
and in the same manner that woven garments of flax, 
wool, cotton, and silk became cheaper than skins of 
animals ; that parlor matches were made more econom- 
ical than the tinder-box, gas undersold tallow candles, 
and electricity will ultimately be cheaper than either. 
This explains why machinery, which produces wealth 
so cheaply in England and America, cannot be em- 
ployed in Asia. In short, it is a universal law in the 
world of economics that the use of machinery ultimately 
depends upon the consumption of wealth by the masses,* 

* For a more extended treatment of the economic relation of con- 
sumption to the production of wealth, the reader is referred to the 
chapter of the " Law of Production" in the next volume. 



34 WEALTH AND PROGRESS. 

and consequently can only be successfully extended 
as the general rate of real wages is permanently ad- 
vanced. Hence, to promote this is really the first 
step toward the abolition of enforced idleness and the 
elimination of poverty. 

Therefore, as poverty can only be permanently di- 
minished as the production of wealth per capita is in- 
creased, and that can only take place as the use of im- 
proved methods of production are extended, which in 
turn depends upon wages, it is very clear that the first 
step toward the elimination of poverty is to promote 
the general permanent increase of real wages. 



PART II. 

THE LAW OF WAGES STATED AND HISTORICALLY 
ESTABLISHED. 



CHAPTER I. 

POPULAR THEORIES OF WAGES CONSIDERED. 
Section I.'— The Wages-Fund Theory. 

The " wages-fund " theory is, briefly stated, the 
doctrine of " supply and demand " applied to wages. 
This theory, which was suggested by Adam Smith, 
and subsequently developed by Ricardo, McCulloch, 
and Mill, constitutes one of the cardinal dogmas upon 
which the industrial policy of the present century has 
been based. 

According to this doctrine, a certain portion of the 
capital of every country is set apart exclusively for the 
payment of wages, which is called the " wages fund." 
More than that amount, it is held, the laborers cannot 
receive, and less than that amount the employers can- 
not pay.* That is to say, the aggregate amount paid 
in wages in any country, at any given time, is neither 
more nor less than that contained in this fund, and 
that, therefore, the rate of wages is regulated solely 

* Mill, in the Fortnightly Review for May, 1869. 



36 WEALTH AND PROGRESS. 

by the proportion between the number of the laboring 
population and the amount of this " wages fund." 
This being granted, it is held that wages can only be 
increased by one of two ways : either by increasing 
that portion of capital devoted to the payment of 
wages (the wages fund) or by reducing the number 
of laborers among whom that fund is to be divided. 
" The well-being and comfort of the laboring classes 
are, therefore, especially dependent on the relation 
which their increase bears to the increase of the capital 
that is to feed and employ them. If they increase 
faster than capital, their wages will be reduced ; and 
if they increase slower, they will be augmented. . . . 
A nd every scheme for improving the condition of the labor- 
er which is not bottomed on this principle, or which has 
not an increase of the ratio of capital to population for 
its object, must be Completely nugatory and ineffectual."* 

" If wages are higher at one time or place than at 
another, if the subsistence and comfort of the class of 
hired laborers are more ample, it is for no other reason 
than because capital bears a greater proportion to popu- 
lation. . . . The condition of the class can be bettered 
in no other way than by altering that proportion to 
their advantage ; and every scheme for their benefit 
which docs not proceed on this as its foundation is, for 
all permanent purposes, a delusion." f 

American writers have mainly followed in the same 
strain.^; Professor Perry, who may be taken as more 



* McCulloch's " Principles of Political Economy," Part III., sec. 

7. P- 174- 

f Mill's " Principles of Political Economy," Book II., ch. 11, §3. 

% F. A. Walker is an exception, and although not the first to reject 
the wages-fund theory, was the first to present a counter-theory, which 
will be considered in the next section. 



IT IS THE DOCTRINE OF LOW WAGES. 37 

than an average representative of American econ- 
omists, accepts this theory of wages as taught by the 
English writers without qualification.* This theory 
furnishes the employer with an ever-available defence 
against raising wages. If a single workman asks for 
an increase of wages, the employer may sympathiz- 
ingly assure him that his condition ought to be im- 
proved ; but on the authority of political economy he 
can philosophically say : " I would gladly raise your 
wages if there was anything in the wages fund with 
which to do it ; but you know the wages fund is all di- 
vided among you laborers, and, therefore, I could only 
increase your wages by reducing those of some other 
laborer, and that would be a great injustice to him." 
And should the laborers generally ask for an increase 
of wages, this theory furnishes the employer with an 
equally conclusive reply. He can say to them : " If 
you want an increase of ten per cent in your wages, 
you must first do one of two things : either increase my 
wages fund ten per cent, or reduce your own numbers 
one tenth." Unless they will accept one of these al- 
ternatives, he can, with the full authority of economic 
science, declare that no increase in wages is possible. 

This doctrine, together with the theory taught by 
these writers, " that the rate of profits can never be in- 
creased but by a fall in zvages," f goes far to excuse if 
not sustain the charge " that the current political econ- 
omy, instead of being a social science, is little else but 
a specious argument for low wages." 

It maybe said that this doctrine has been exploded. 



* " Political Economy," isted., pp. 122, 123. 

f Ricardo, " Political Economy and Taxation," ch. 7, p. 75. See 
also Mill, " Principles of Political Economy," Book II., ch. 15, § 7. 



38 WEALTH AND PROGRESS. 

This is a great mistake. No doctrine can properly be 
regarded as exploded so long as it is the recognized 
basis of the industrial policy of the civilized world. 
The theory that wages are determined by the supply 
and demand of labor is not only acted upon by the 
capitalists, but it is accepted by the workingmen and 
reasoned upon by standard economists down to this 
hour. 

In fact, the idea that the price of commodities and of 
labor rise according as the demand is greater and falls 
as it is less than the supply, is all but universally ac- 
cepted. Every argument by economists for limiting 
the population, every effort by capitalists to corner 
commodities or regulate the output of products, is 
based entirely upon this idea. And every strike for 
higher wages is only the practical application of the 
same doctrine by the workingmen. It is simply an 
effort to increase the price of labor by limiting the 
supply. 

When the laborers combine to strike and prevent 
others from taking their places, they are doing exactly 
what the capitalists do when they attempt to corner 
commodities, or arbitrarily regulate the output of prod- 
ucts, or impose high tariffs upon competing producers. 
The employers, economists, and editors, when pouring 
out their unlimited censure upon the heads of the 
workingmen for inflicting injury upon themselves and 
the community by the mistaken notion that strikes can 
ever permanently increase wages, should remember 
that in doing this the workingmen are only logically 
applying the vicious doctrine that for a whole century 
has been, by both practice and precept, ground into 
them by the employing classes. 

It is true that several writers have taken more or 



JOHN STUART MILL'S HALF CONVERSION. 39 

less pronounced exception to certain phases of this 
theory, the most vigorous and successful of which was 
made by Mr. Thornton in his work " On Labor,"* 
which was sufficiently strong to convert John Stuart 
Mill, who was its most zealous and able exponent. 
Even Mr. Thornton, however, only rejected one half 
of the theory. While he objected to that part of the 
doctrine which affirms that " no less than the full 
amount of the wages fund can be paid in wages," both 
he and Mr. Mill continued to cling to the other half, 
which says, " More than that amount cannot possibly 
be paid in wages." 

But as neither of them offered any substitute for 
that portion of the doctrine they had rejected except 
the vague idea of competition, for which Thornton 
declares " there is no law," the original theory sub- 
stantially retains its place in current political economy 
as the law of wages. 

So pronounced is this that Professor Perry, one of 
the leading economists in this country, in a revised 
edition of his works (1883) reaffirms the whole doc- 
trine, and Professor Cairnes, one of England's most 
learned economists, in his recent work f makes an 
elaborate attempt to defend the wages-fund theory in 
its original entirety. 

In his argument Professor Cairnes squarely admits 
that there is no economic law or force to prevent any 
employer from appropriating all or any portion of the 
wages fund in his possession to any other purpose than 
that of paying wages if he chooses so to do, and says :£ 



* London, 1869. 

t " Some Leading Principles in Political Economy," ch. 1, Part II. 

X Ibid., p. 182. 



4o WEALTH AND PROGRESS. 

" Undoubtedly ' there is no specific portion of any in- 
dividual's capital which the owner must necessarily ex- 
pend upon wages.' ' There is no law fixing the 
amount ' of any man's ' domestic expenditure, and 
thereby fixing likewise the balance available for in- 
dustrial operations. ' Nor is any man ' bound to spend ' 
in the payment of labor ' the utmost he can afford to 
spend.' " 

Then, after expressing his surprise that any one 
should ever have so understood the wages-fund theory, 
he endeavors to show that the error of the assailants 
of this doctrine all arises from a misunderstanding of 
the words " determination" and " predetermination." 
Speaking of Mr. Thornton in particular, he says :* 
" His reasoning from beginning to end proceeds upon 
a radically erroneous conception of the nature of an 
economic law, of what is meant by ' predetermination ' 
and ' limitation' in the sphere of economic action. 
A ' law ' in political economy does not mean either 
legal coercion or physical compulsion, or yet moral 
obligation, nor does the ' determination' expressed 
in economic law mean the necessary realization of cer- 
tain results independently of the human will. What an 
economic law asserts is, not that men must do so and 
so, whether they like it or not, but that in given 
circumstances they will like to do so and so ; that their 
self-interest or other feelings will lead them to this re- 
sult. The ' predetermination ' in question is of that 
sort which leads a hungry man to eat his dinner or an 
honest man to pay his debts, and depends for its ful- 
filment not upon external compulsion of any sort, but 
upon the influence of certain inducements on the will, 

* " Some Leading Principles in Political Economy," pp. 84, 85. 



PROF. CAIRNES'S DEFENCE EXAMINED. 41 

our knowledge of which enables us to say how in given 
circumstances a man will act. It is in this sense," he 
adds, " that, speaking for myself, I understand the 
' predetermination ' of a certain portion of the wealth 
of a country to the payment of wages." " It is in 
this sense," he says, " that I understand 'predeter- 
mination.' ' Exactly ; but what is " this sense "f The 
explanation still needs explaining. In fact, this state- 
ment is more ingenious than logical, and tends to elude 
rather than elucidate the point ; or, to use Mr. Cairnes's 
own expression, it is simply beside the mark." 

The question at issue is not what are the causes 
which " predetermine" the amount paid in wages ; but 
is the amount so paid " predetermined " at all by any 
cause? Of what economic importance is it that "a 
man does so and so whether he likes it or not," or 
" that he likes to do so and so "? How can it affect 
the question under consideration whether wages are 
paid through " external compulsion"or through " the 
influence of certain inducements on the will," if they 
are paid ? The question is not as to whether or not 
men " like to do so and so," but whether they always 
do "so and so." What difference does it make to the 
laborer or the community whether an employer pays 
wages against his will or not ? 

In truth, men seldom pay wages because " they like 
to do so," but because they must do so or forego some- 
thing they like still better. Economic law, Mr. 
Cairnes's opinion to the contrary notwithstanding, does 
not recognize motives, or likes and dislikes ; it is con- 
cerned only with causes and their effects. 

But what would Mr. Cairneshave us understand the 
term "predetermination" to mean? When he talks 
of " the predetermination of a certain portion of the 



42 WEALTH AND PROGRESS. 

wealth of a country to the payment of wages," does he 
not mean that from the operation of some cause, of 
whatever nature, it is decided, in advance, that the 
whole of this fund must or will surely be paid out as 
wages ? If so, in what does his position differ from 
that of Mr. Mill and other wages-fund advocates? If 
by this statement Mr. Cairnes means that, through 
"the influence of certain inducements on the will," 
that amount is sure to be spent in wages, it is logically 
the same as that of Mr. Mill when he said " that 
amount and no less they (the wage-receivers) cannot 
but obtain." And his statement that "there is no 
specific portion of any individual's capital which the 
owner must necessarily expend upon wages, . . . nor 
is any man bound to spend in the payment of labor 
the utmost he can afford to spend," is as complete, 
though less candid, a surrender of at least that half of 
the wages-fund doctrine as that of Mr. Mill. If, how- 
ever, on the other hand, by "the 'predetermination* 
of a certain portion of the wealth of a. country to the 
payment of wages," it is not intended to mean that it 
is previously " determined " or decided that that 
amount will surely be spent in wages, but only that it 
may and possibly or even probably will be so spent, 
what construction are we to put upon the following 
statement : " The predetermination in question is of the 
sort which leads a hungry man to eat his dinner or an 
honest man to pay his debts." 

If every employer is as sure " to spend in the pay- 
ment of labor the utmost he can afford to spend " as a 
hungry man is to eat his dinner, there can be little 
doubt but that the whole amount of the wages fund 
will always be spent in wages, which is all the most 
orthodox advocate of the wages-fund theory ever 



THE FUTILITY OF PROF. CAIRN ESS PLEA. 43 

claimed. For it is hardly more certain that an apple 
will fall to the ground than that a hungry man will eat 
his dinner, or that an honest man will pay his debts. 
But in order to interpret this statement according to 
the higgling and hauling of Mr. Cairnes's special effort 
to show that predetermination does not mean prede- 
termination, we must not say a hungry man will eat 
his dinner, but only that he may and probably will do 
so, and that an honest man may and probably will pay 
his debts. 

A doctrine which can only be sustained by a use of 
language, according to which it is doubtful whether a 
hungry man will eat his dinner or an honest man pay 
his debts, should only need stating to insure its re- 
jection. 

But, again, if the word " predetermination" is not 
to be understood to mean previously decided, and the 
wages fund is not a fixed amount to be uncondition- 
ally" devoted to the payment of wages, how can the 
general rate of wages be regulated by the proportion 
between the number of the laboring population and 
the amount of that fund, as claimed by all advocates 
of this doctrine, Mr. Cairnes included ? It would be 
just as rational to say the price of shoes depends upon 
the proportion between the number of shoes and the 
amount spent upon jewelry, as to say the general rate 
of wages is decided by the proportion between the 
number of laborers and the amount of a fund that is 
not necessarily spent in the payment of wages. For 
how can the average or general price of a thing be de- 
termined by the proportion between a definite number 
and an indefinite quantity ? 

Yet this is the unenviable position of Professor 
Cairnes ; for while he refuses to admit with Mill, Faw- 



44 WEALTH AND PROGRESS. 

cett, Perry, and other wages-fund advocates that " the 
sum to be divided is a fixed amount," he insists upon 
their conclusion, which wholly depends upon the truth 
of that statement — viz., that the " wages of each de- 
pend solely on the divisor — the number of partici- 
pants ;" for he says : " The aggregate capital being 
less, the wages fund, cceteris paribus, would be less ; 
and unless laborers consent to reduce their numbers, 
the general rate of wages would fall." * In a word, 
when Mr. Cairnes admitted that " there is no specific 
portion of any individual's capital which the owner must 
necessarily expend upon wages," and that no man is 
" bound to spend in the payment of labor the utmost 
he can afford to spend," he allowed the whole wages 
regulating power to be taken out of his wages-fund 
theory. And in his painfully inconsistent argument, 
in which, through the straining of language and twist- 
ing of terms, he endeavors to hold on to the conclu- 
sions of the theory after its basis is destroyed, he has, 
if possible, more fully demonstrated the utter inde- 
fenceableness of the wages-fund doctrine as the law of 
wages. 

But suppose the wages-fund doctrine, as stated by 
Mill, were true, and a certain amount of wealth, which 
could neither be increased nor diminished, is divided 
among the laborers as wages, would that constitute in 
any economic sense a law of wages ? Certainly not. 
A law of wages must do more than show how the ag- 
gregate amount of wealth paid in wages is determined ; 
it must explain all the phenomena connected with 
wages. To say that a given amount divided equally 
among a given number will yield to each a larger 

* " Some Leading Principles in Political Economy," p. 223. 



WAGES NOT PAID FROM CAPITAL. 45 

amount, according as the number of participants is 
diminished and vice versa, is merely to state a truism. 
But it affords no explanation of why some laborers get 
a much larger portion of this fund than others, and 
why the same laborers, under different conditions and 
in different places, obtain quite different amounts for 
their labor. In short, it explains none of the pertur- 
bations connected with wages. Hence, if wholly cor- 
rect as to fact, it would in no sense furnish a law of 
wages. 

Nor is it in any important respect strengthened by 
the Thornton-Mill amendment. In the revised form 
this theory affirms (1) that while less than the full 
amount of the wages fund (" actually accumulated 
capital'"') * may be paid in wages, " no more than that 
amount can possibly be expended on labor;" f and 
(2) that wages are governed by the relative demand 
and supply of laborers, rising as the demand (" act- 
ually accumulated capital ") exceeds the supply, and 
conversely falling as the supply of laborers exceeds 
the demand. 

How stand the facts? First : Is it true that laborers 
are never employed until the necessary capital to pay 
their wages has been " actually accumulated "? Is it 
true that " no more can possibly be expended on labor" 
than is then and there in the wages fund ? Most 
certainly not ! On the contrary, in many employ- 
ments the reverse is the rule. In new countries, 
for instance, the wages fund — i.e. , the amount of capi- 
tal actually then and there available for the payment 
of wages — is seldom sufficient to pay the wages of all 

* Perry's " Political Economy," p. 122, first edition, 
f Thornton " On Labor," p. 85. 



46 WEALTH AND PROGRESS. 

the laborers employed at the prevailing rate for a 
month, a week, or even a day in advance, nor the 
day, nor week, nor even the month after the labor has 
4i>een performed, without drawing a part, or all of it, 
from the products of the laborer during that time. It 
is simply because the previously accumulated capital 
(the wages fund) is wholly inadequate to the previous 
or prompt payment of wages that the laborers have to 
wait from three to six months for their wages, and 
sometimes even a longer time. Nor is it necessary to 
go to Australia, South America, or any other foreign 
country for the evidence of this fact. It can be seen 
every day in the United States. It is the common 
custom among our Western farmers to hire laborers 
by the season or by the year at a certain stipulated rate 
of wages, a fraction only of which is or can be paid 
weekly or monthly, and the balance at the end of the 
term. Nor is the reason for this mode of fractional 
payment difficult to understand. It is simply because 
the amount of his previously accumulated capital 
(wages fund), which is available for the payment of 
wages, is too small to enable him to pay the wages in 
full every week. His capital is mostly invested in 
stock, tools, machinery, buildings, etc., and the balance 
is only sufficient to enable him to give each laborer a 
portion of his wages each week or month, and even that 
is frequently paid in board and lodgings, or orders 
on the store, which is only another form of credit to 
the farmer. It is not until the crop is harvested and 
taken to market that the farmer is able to pay the la- 
borers their full wages, the amount of which, it will be 
remembered, was definitely fixed before the laborers* 
work began. If the amount the farmer paid in wages 
was limited to his actual " wa^es fund " on hand at 



WAGES PAID FROM PRESENT PRODUCT. 47 

the time he hired his laborers, it is clear that he would 
generally be forced to pay from twenty-five to fifty per 
cent lower wages, or else employ a proportionately 
smaller number of laborers. But why does he pay a 
higher rate of wages than his available funds will war- 
rant ? some " wages-fund " disciple may inquire. Why, 
simply because he is compelled to do so or go without 
the laborers. The reason the farmer cannot get the 
work done for less is quite another question, which will 
be fully considered in the next chapter ; it is sufficient 
for the present purpose to say that he is unable to do 
so. He pays the least he can, and if he pays a higher 
rate of wages than his " wages fund " will afford, it is 
for no other reason than that he cannot get it for less. 

Then why, it may be asked, does he not employ 
fewer laborers ? The answer to this is equally clear : 
it is for the simple reason that if he employed only the 
small number of laborers his present " wages fund " 
would enable him to pay, a much smaller amount of 
wealth would be produced, and his profits at the end 
of the year would be proportionately less. It is clear 
to the unsophisticated farmer, though it may not be to 
Prof. Cairnes, that by paying the wages of the laborer 
out of the products of his labor, he is enabled to pay a 
higher rate of wages, employ a larger number of la- 
borers, produce more wealth, and have a much larger 
amount as profit, than he would have if his wages- 
paying possibilities were limited to the amount of cap- 
ital contained in his previously accumulated " wages 
fund." 

It is, of course, necessary that sufficient capital be 
accumulated to furnish in advance the tools, stock, etc., 
with which to work, but this is not true of wages. 
Labor is almost invariably supplied on credit, wholly 



48 WEALTH AND PROGRESS. 

or ill part, and that, too, without either bonds, mort- 
gages, or other securities being given, and its wages 
are paid out of its own future productions, and not 
from its employer's previous accumulations. 

Nor is the operation of this principle limited to new 
countries or to agriculture, but it obtains with equal 
force in old countries, and in the most modern manu- 
facturing, mercantile, and commercial industries. 

It is true that wages are paid more promptly and 
with greater frequency in older and more advanced 
manufacturing countries than in new, thinly settled 
agricultural countries. In England, for instance, the 
prevailing custom is to pay wages every week, or at 
most once a fortnight, and in America the custom in 
large cities and manufacturing centres is to pay wages 
at least once a month, and in many cases they are paid 
fortnightly or weekly. But this greater promptness 
and frequency in the payment of wages in old and 
manufacturing than in new and agricultural countries 
is not due to the existence of a greater proportion of 
accumulated capital available for the payment of wages 
(wages fund) in the one case than in the other, but 
because superior facilities for prompt and easy ex- 
change of the products of labor exist in the former 
than in the latter communities. The manufacturer in 
New York and New England can put his goods upon 
the market and generally sell them a week from the 
time they leave the factory. He can, therefore, pay 
his laborers their wages out of the proceeds of their 
current labor every month, or even fortnightly, with 
far less inconvenience and difficulty than the Australian 
or Western farmer can do so every three or six months. 

Clearly, therefore, it is not only true that more can 
be and is paid in wages than exists in the previously 



THE DOCTRINE INADEQUATE IF TRUE. 49 

accumulated wages fund, but that wages are not drawn 
from previously accumulated capital, they being paid 
out of current products of labor and that portion of 
capital which is invested in tools and raw material. 
Consequently, neither the aggregate amount nor the 
general rate of wages can possibly be determined by 
the existence or condition of any such wages fund. 

Second : We now come to the second or regulative 
phase of the wages-fund doctrine. If this theory were 
correct as a general statement of fact— i.e. , if it were 
true that " no more can possibly be expended on 
labor" than is previously accumulated in the wages 
fund, which we have seen it is not, the question is, 
Does it afford an explanation of the various phenomena 
connected with wages ? We answer no ! 

After affirming that no more can be divided among 
the laborers as wages than is contained in the wages 
fund, it declares that that division is determined by the 
proportion between the number of laborers and the 
amount in that fund, as already shown in the former part 
of this chapter ;* in other words, by the so-called law of 
supply and demand, f according to which wages will 



See J. S. Mill's " Principles of Political Economy," Book II., 
ch. 11, § 3 ; McCulloch's " Principles of Political Economy," Part 
III., sec. 7 ; Perry's " Political Economy," pp. 122, 123, first edi- 
tion ; Favvcett's " Economic Condition of the British Laborer," 
pp. 120, 137, 183. 

f " Finally," says Mill, " there are commodities of which, though 
capable of being increased or diminished to a great and even an un- 
limited extent, the value never depends upon anything but demand and 
supply. This is the case in particular with the commodity Labor."— 
"Principles of Political Economy," Book III., ch. 2, § 5. 

' Demand and supply, in their action and reaction on each other, 
furnish the universal law of wages, as of everything else bought and 
sold." — Perry's " Political Economy," p. 233, 18th edition. 
,4 



50 WEALTH AND PROGRESS. 

never rise or fall except as the demand for labor is in 
excess of the supply, or vice versa. And, to use the 
language of Mill, " this rise or fall continues until the 
demand and supply are again equal to one another"" 
— that is to say, the rise will continue until the wages 
fund is all divided among the laborers, and the fall will 
continue until the fund is divided among all the labor- 
ers. Thus, other things being the same, if the num- 
ber of laborers is reduced the rate of wages will rise, 
and the rise will continue until the whole of the fund 
is divided among the reduced number of laborers. 
And, on the other hand, if the number of laborers is 
increased the rate of wages will fall, and the fall will 
continue until all the laborers can obtain a portion of 
the fund — i.e., until the rate of wages is sufficiently low 
to enable the amount in the fund to give employment 
to the whole of the increased number of laborers at 
some price. f 

How does this accord with the facts of experience ? 
Is it true as a matter of history (i) That wages never 
rise except when the demand for labor is in excess of 
the supply? and (2) That " the rise or fall continues 
until the demand and supply are equal to one an- 
other" ? Since the close of the fourteenth century 
there has never been a time (in England) when the 
supply of labor has not been in excess of the demand. 

This fact is abundantly established by the almost 
continuous efforts, legislative and otherwise, to deal 
with enforced idleness, pauperism, vagrancy, etc., dur- 
ing the last four hundred years, as the history of the 
poor laws, the act of settlement, the Malthusian 

* " Principles of Political Economy," Book III., ch. 2, § 4. 
f See Perry's " Political Economy," pp. 122, 123, first edition. 



THE FACTS ALL AGALNST THE THEORY. 51 

crusade, trades-unionism, and modern socialism con- 
clusively show. And still, during this period when 
the supply of labor has been continuously and some- 
times frightfully in excess of the demand, wages, in- 
stead of falling, have risen from fivepence to five shil- 
lings a day, or about twelve hundred per cent, being in 
direct opposition to the wages-fund theory. Nor is 
the claim that " the rise or fall continues until the 
supply and the demand are equal to one another" any 
nearer the truth. There has never been a time but 
once in the industrial history of England,* since the 
first dawn of the wages system, in the twelfth century, 
when the, demand for labor was distinctly in excess of 
the supply. That was in the middle of the fourteenth 
century (1348-50), when over one third of the people 
were stricken down by the pestilence known as the 
" Black Death." Did wages continue to rise until the 
demand and supply were equal ? Nothing of the 
kind. Wages only rose a penny, and, in some rare 
cases, perhaps twopence a day, although labor was so 
scarce that " crops rotted in the fields" because there 
was no one to gather them. And even this small rise 
was not due to the scarcity, as is shown by the fact 
that when the supply of labor again became in excess 
of the demand, wages did not fall again to their pre- 
vious level, f Not even in the worst days of the Tudors 
and Stuarts, or at any time since, even in periods of 
industrial depressions, when enforced idleness has been 
most prevalent, have wages ever been as low as they 
were during that time, when the demand for labor was 



* We take England because its industrial history is more extended, 
continuous, and complete than that of any other country. 
f See Chapter IV., Part II. 



52 WEALTH AND PROGRESS. 

more in excess of the supply than at any other time in 
the world's history. 

Again, if it were true that wages always fall when 
the supply of labor is in excess of the demand, en- 
forced idleness or able-bodied pauperism in any general 
or permanent sense would be impossible, because wages 
would not stop falling until the wages fund was divided 
among all the laborers — i.e., until ail the laborers were 
employed at some wages or the wages system merge 
back into slavery. So far from this being the case, 
there is not a country in the world in which it has 
ever occurred. We do not say that there never was a 
time in any country when the laborers were all em- 
ployed, but what we do say is that they were never all 
so employed by lowering the general rate of wages. 
History does not afford a single instance of absorbing 
enforced idleness by reducing wages. In fact, such a 
thing is economically impossible. On the contrary, 
however, although enforced idleness (which is the ex- 
cessive supply of labor) has been more or less general 
and permanent, as is shown by able-bodied pauperism, 
wages have increased several fold ; clearly showing, not 
only that wages do not necessarily fall when the supply 
of labor is in excess of the demand, but that they may 
and do sometimes even rise under such circumstances. 

Manifestly, therefore, as it is not true that the ag- 
gregate amount paid in wages is limited to the amount 
of " previously accumulated " capital (the wages fund), 
and as the general rate of wages is not determined by 
the proportion between the number of laborers and 
that fund, the wages fund or supply and demand 
theory, either as originally stated or subsequently 
amended, is wholly inadequate to even approximately 
explain the law of wages. 



FRANCIS A. WALKER'S THEORY STATED 53 



SECTION II. — Francis A. Walker s Theory. 

Francis A. Walker, who is one of the most liberal 
and popular economists in this country, is a pronounced 
opponent to the wages-fund doctrine. Unlike Mr. 
Thornton, however, he was not content to merely at- 
tack the English theory, but he boldly assumed the 
task of furnishing a new one to supersede it. 

This theory, which we shall now briefly consider, will 
be found stated in Chapter VIII. of his " Wages Ques- 
tion" (1876), also restated in Chapter V., Part IV., of 
his " Political Economy" (1883). In presenting the 
new doctrine Mr. Walker says :* The " popular theory 
of wages ... is based upon the assumption that 
wages are paid out of capital, the saved results of the 
industry of the past. Hence, it is argued, capital must 
furnish the measure of wages. On the contrary, I hold 
that wages are, in a philosophical view of the subject, 
paid out of the product of present industry ; and hence 
that production furnishes the true measure of wages." 
Again :f " The employer purchases labor with a view 
to the product of the labor ; and the kind and amount of 
that product determine what wages he can afford to pay. 
... If that product is to be greater, he can afford 
to pay more ; if it is to be smaller, he must, for 
his own interest, pay less. . . . Thus," he adds, " it 
is production, not capital, which furnishes the mo- 
tive for employment and the measure of wages." % 
In his later work he says :§ " Wages equal the whole 
product minus rent, interest, and profits." " In this 



* " Wages Question," p. 12S. % The italics are ours. 

f Ibid., pp. 129, 130. § "Political Economy," p. 284. 



54 WEALTH AND PROGRESS. 

vie n the laboring class receive all they help to pro- 
duce, subject to deduction on the three several ac- 
counts mentioned,"* and in showing how the amount 
the laborer receives is determined, he says : f In de- 
termining how much in the shape of rent, interest, and 
profits shall be taken out of the product before it is 
turned over to the laboring class to have and to enjoy, I 
hold that the only security which the laboring class can 
have that no more will be taken than is required by the 
economical principles governing those shares respec- 
tively, is to be found in full and free competition, each 
man seeking and finding his own best market unhin- 
dered by any cause, whether objective or subjective in 
its origin." 

From the above it will be seen that Mr. Walker's 
doctrine may be briefly stated as follows : (i) That 
wages " are paid out of the product of present indus- 
try," and, therefore, " production furnishes the measure 
of wages ;" (2) " That wages equal the whole prod- 
uct minus rent, interest and profits," and (3) That 
the proportion of the whole that will be left for the la- 
borers depends upon " free competition." 

Now, assuming that these propositions are all cor- 
rect, how do they enable us to explain the law of 
wages? How does this view enable us to understand 
why wages are lower in some countries than in others ; 
lower in rural districts than in large cities ; lower in 
some industries than in others in the same localities ; 
lower in agricultural than in manufacturing employ- 
ments ; and why women's wages are lower than men's ? 

Let us see. The first half of the first proposition, 
viz., " that wages are paid out of the product of pres- 

* " Political Economy," p. 263. f Ibid., p 285. 



WAGES PAID BEFORE PROFITS OR RENT. 55 

eat industry," is unquestionably correct ; but how 
does it necessarily follow from this that " production is 
the measure of wages" ? Because, says Mr. Walker, 
wages take the " whole product, minus rent, interest, 
and profits," and these three remaining the same the 
amount paid to labor would increase directly with the 
increase in the aggregate amount produced. 

But this assumes that rent, interest, and profits are 
taken out of the product before wages are paid. For 
this assumption Mr. Walker has not given the slight- 
est warrant in either fact or reason. Nay, more, he 
has not only failed to show that rent, interest, and 
profits are taken before wages, which he is in logic 
bound to do before he has the right to thus conclude, 
but he has conclusively shown that the reverse is true. 
In discussing the question of rent in the same work * 
he is ultra-Ricardian, and takes great pains to show 
that rent does not come out of wages, but that it is 
what is left after wages and other items in the cost of 
production are paid. That it is because what he calls 
" no-rent-land " will only yield enough to pay wages 
and profits that rent cannot be obtained from it, " and 
that the amount received by the landlord as rent is not 
paid either by the agricultural laborer or by the con- 
sumer of the produce, whether food, fuel, or fibre, "f 
Thus Mr. Walker, like a " Ricardian of Ricardians," 
as he styles himself, shows that wages are paid before 
rent. 

If we turn to his discussion of profits we shall find 
that Mr. Walker, with the full measure of his usual vigor 
and force, insists that profits are not taken out of wages, 

* " Political Economy," p. 213, par. 244 ; see also "Land and Its 
Rent," pp. 29, 30. 

f " Political Economy," p. 248, par. 278. 



56 WEALTH AND PROGRESS. 

but, like rent, are what is left after wages are paid. He 
says : * ." Do profits, then, come out of wages ? Not at 
all. The entrepreneurs of the lowest industrial grade — 
the no-profits employers, as we have called them — must 
pay wages sufficient to hire laborers to work under 
their direction. These wages constitute an essential 
part of the cost to the employer of the production of 
the goods. The fact that these wages are so high is the 
reason why the employers are unable (their skill and 
power in organizing and energizing labor and capital 
being no greater than they are) to realize any profits 
for themselves." (The italics are ours.) 

Can anything be plainer than this ? Here Mr. Walk- 
er declares that the reason why unsuccessful employ- 
ers have no profits is because the product is all taken 
in wages and other costs. In other words, it is because 
with their skill, capital, methods, etc., they were un- 
able to produce more than would cover zvages, etc., 
that they have to go without profit. f 

It will be observed, therefore, that, according to Mr. 
Walker's own showing, rents and profits are not taken 
out of the product before wages, but, on the contrary, 
they consist of what remains after wages are paid. 

Now, what, under these circumstances, becomes of 
Mr. Walker's theory that production is the measure 
of wages ? Why, it is entirely demolished. So far 
as affording any true explanation of the law of tvages, 
there is literally nothing left of it. If wages are paid 

* " Political Economy,*' p. 254, par. 284. 

| In this he is unquestionably correct. Every business failure is a 
proof of it. It is because the manufacturer or merchant, after paying 
wages (which legally as well as economically has the first claim) has 
no profits, or not enough to pay other costs, that he goes into bank- 
ruptcy or leaves the business. 



PRODUCTION NOT THE MEASURE OF WAGES. 57 

before rent and profits, as Mr. Walker shows, then, 
manifestly, they can exercise no influence in deter- 
mining wages. It would be just as reasonable to say 
that a person who will draw water from my well to- 
morrow by so doing will limit the quantity I can draw 
from it to-day. Under these circumstances to say 
" that wages equal the whole product minus rent, in- 
terest and profits " is merely to utter a truism, which 
conveys no more information than would the announce- 
ment of a boy who hooked a single fish, that his catch 
equalled all the fish in the sea minus those he didn't get. 

In what sense, then, is production the measure of 
wages ? The mere fact that wages are drawn from 
production does not make production the measure of 
wages. True, wages cannot be more, but they can be 
and are less than production. The amount produced 
may determine the former, but it clearly does not 
regulate the latter. The fact that there is but a hun- 
dred cannot possibly be the cause of my not having 
more or less than fifty. Since wages are the first to 
draw upon production, and since they do not take all 
the product, the question is, What determines the 
amount or the proportion that they do take ? It can- 
not be production, because there is already more pro- 
duced than they take. It cannot be rent or profits, 
because, as Mr. Walker has shown us, they only take 
what is left after wages are determined. Then, how 
the amount that goes to wages is regulated is still the 
question. And it is the question to which Mr. Walk- 
er's theory, stripped of the errors he himself explodes, 
affords no answer. 

Again, in order to sustain his position that wages are 
determined by production, he points to the fact that 
wages are highest where production is largest. Well, 



58 WEALTH AND PROGRESS. 

if wages are high because production is large, why is 
production large? The answer to this is important, 
because if wages depend upon production, in order to 
raise wages we must know how to increase production. 
Now, suppose a given community produce a million 
dollars' worth of commodities a week and pay half a 
million dollars in wages, and, after a few years, the 
product rises to two millions and wages increase to a 
million dollars a week, if we ask Mr. Walker why the 
wages increased from half a million to one million a 
week, he will reply, " Because the product was doub- 
led." But if we follow with the second question, the 
answer to which is necessary in order to understand 
the answer to the first, and ask " Why the product was 
doubled?" his theory has no reply. But if we leave 
him a moment and seek the true answer to the second 
question, we shall find that it proves his reply to the 
first one to be entirely fallacious. 

Why was the product doubled ? Why were two 
millions produced instead of one ? The answer is very 
simple. The second million was produced for the same 
reason that the first was, viz., because it was demanded, 
the only reason why anything is ever continuously 
produced. Then, the product was doubled because 
the demand was doubled. Why was the demand 
doubled ? Because the normal consumption of the mass- 
es (wage-receivers) in the community, which is com- 
mensurate with and indicated by wages, was doubled. 
Thus we find that instead of the wages or consumption 
by the masses being governed by production, as Mr. 
Walker's theory affirms, the reverse is everywhere true, 
and production is determined by consumption, or 
wages.* 

* See Chapter II. 



LESS CONSISTENT THAN THE ENGLISH THEOR Y. 59 

Again, if it were true, as Mr. Walker would have us 
believe, that wages rise because production is increased, 
such a thing as a business depression would be impos- 
sible. For, as soon as the warehouses began to get 
overstocked, wages would begin to rise, and the stock 
would soon be carried off. But we know from bitter 
experience that the reverse of this is the case ; that 
when the warehouses begin to fill up factories begin to 
stop, wages fall, and " hard times," with all their social 
evils, overtake us. 

It will thus be seen that whichever way we consider 
Mr. Walker's theory of wages, it is wholly inadequate 
to explain even the ordinary facts connected with the 
subject. He, however, affirms an important truth not 
recognized by the old school, viz., that wages are 
drawn from the product of present industry instead of 
from a wages fund. But, in attempting to prove that 
because wages are paid out of present industry, there- 
fore " production is the measure of wages," he fell into 
one of the cardinal errors of the old doctrine, which, 
having assumed that wages are drawn from capital, 
affirmed that, therefore, capital is the measure of 
wages.* 

In order to sustain this assumption Mr. Walker 
found it necessary to forget the conclusions he had 
elsewhere established, and adopted the most obvious 
errors of Henry George by inverting the natural order 
of economic distribution. Consequently, so far from 
affording any explanation of the true law of wages, 
Mr. Walker's theory is really less complete, more in- 
consistent, and quite as unsound as the English theory. 

* " Wages Question," p. 12S. 



6o WEALTH AND PROGRESS. 



SECTION III. — Henry George's Theory. 

Mr. George's theory of wages, briefly stated in his 
own words, is as follows :* "In their degree wages 
rise and fall in obedience to a common law. What is 
this law ? The fundamental principle of human action 
— the law that is to political economy what the law of 
gravitation is to physics — is that men seek to gratify 
their desires with the least exertion. . . . Now, under 
this principle, what, in conditions of freedom, will be 
the terms at which one man can hire others to work 
for him ? Evidently they will be fixed by what the men 
could make if laboring for themselves. . . . Thus the 
wages which an employer must pay will be measured 
by the lowest point of natural productiveness to which 
production extends, and wages will rise or fall as this 
point rises or falls. . . . Here, then, we have the law 
of wages as a deduction from a principle most obvious 
and universal ; that wages depend upon the margin of 
cultivation ; that they will be greater or less as the prod- 
uce which labor can obtain from the highest natural 
opportunities open to it is greater or less, flows from 
the principle that men will seek to satisfy their wants 
with the least exertion." 

After devoting seven pages to emphasizing the above 
idea, he restates his whole conclusions thus :f " The 
demonstration is complete. The law of wages we have 
thus obtained as the corollary of the law of rent, and 
it completely harmonizes with the law of interest. It 
is that wages depend upon the margin of production, or 



* " Progress and Poverty," pp. 150, 151, 152, popular edition, 
t Ibid., pp. 156, 157, popular edition. 



HIS THEORY STATED IN HIS OWN WORDS. 6t 

upon the produce which labor can obtain at the highest 
point of natural productiveness open to it without the 
payment of rent. ' '* 

To still further emphasize and enforce this theory, 
he resolves it into three formal propositions as fol- 
lows :f 

" Where land is free and labor is unassisted by capi- 
tal the whole produce will go to labor as wages. 

" Where land is free and labor is assisted by capital, 
wages will consist of the whole produce, less that part 
necessary to induce the storing up of labor as capital. 

"Where land is subject to ownership and rent arises, 
wages will be fixed by what labor could secure from 
the highest natural opportunities open to it without 
the payment of rent." 

Now, it will be seen from the above, all of which is 
in Mr. George's own words, that his doctrine of wages 
affirms three propositions : 

First. That wages — the laborer's income, when work- 
ing for an employer — where land is free, is determined 
by what he could obtain by working for himself on 
the best land obtainable. 

Second. That wages, where land is subject to private 
ownership and rent is paid, are determined by what 
the laborer could procure from the best land obtainable 
without paying rent. 

Third. That as private ownership in land extends 
and rent rises, the margin of cultivation is lowered ; 
hence, the amount obtainable from free or " no-rent" 
land diminishes and wages fall. 

From these propositions it follows, as a logical ne- 
cessity : 

* The italics are his own. 

\ " Progress and Poverty," pp. 156. 157, popular edition. 



62 WEALTH AND PROGRESS. 

(i) That wages will always be the highest where land 
is not subject to private ownership, or where the best 
land can be had free of rent. 

(2) That where private ownership of land obtains, 
and rent is paid, wages will diminish, or at least be ar- 
rested as rent increases ; consequently, where rent is 
the highest wages will be the lowest ; or 

(3) That where all land is subject to ownership and 
pays rent, wages will be equal to what the laborer 
could obtain from the poorest land, minus the rent. 
Consequently, the difference in wages in different com- 
munities depends entirely upon the difference in the 
productivity of the " no-rent" land. 

(4) Therefore, the only way real wages can be in- 
creased is by reducing or abolishing rent, or, as Mr. 
George puts it, abolishing " the private ownership in 
land." 

This doctrine, whatever else may be said of it, has 
the merit of novelty, and, unlike Mr. Walker's, is at 
least consistent with the general teachings of its author. 
Indeed, it is a necessary part of Mr. George's scheme 
to make all economic movement and social progress 
depend upon rent or the private ownership of land. 

But the question that is more important than its 
consistency with itself or with the general economic 
doctrines of its author (which we have elsewhere 
shown* to be mainly fallacious) is its consistency with 
ascertained facts and well-established principles. 

Is the doctrine true, and does it afford an ex- 
planation of industrial phenomena ? is the question. 
Does it, for instance, explain why wages have risen 



* See article in the Eonim (N. Y.)< for March, 1887, entitled 
" Henry George's Economic Heresies." 



WILL TILL THEORY EXPLAIN THE FACTS? 63 

in some countries and not in others during the last two 
hundred years ; why wages are higher in some indus- 
tries than in others in the same localities, and differ- 
ent in the same industries in different localities ; why 
they are higher in large than in small cities ; and 
higher in manufacturing than in agricultural countries 
and districts ; and why men's wages in the same in- 
dustries and under the same conditions are uniformly 
higher than those of women ? No doctrine which 
cannot answer these questions can furnish a scientific 
or philosophic explanation of the economic law of 
wages. Can Mr. George's theory stand this test ? 
Let us see. We will take the propositions in the order 
named above. 

(1) Is it true, then, that wages {i.e. , the income of 
the laboring classes) are the highest where land is not 
subject to private ownership and where no rent is paid 
for its use ? 

The most elementary acquaintance with industrial 
history is sufficient to prove that the very opposite is 
everywhere the case. 

There never was a time nor place in the world when 
land was not subject to private ownership, and hence 
no rent paid for its use, that the laborer's wages were 
half or even one tenth as much as they are to-day in 
England and the United States, where rents are the 
highest of anywhere in the world. :< Where land is 
free and labor is unassisted by capital," says Mr. 
George, " the whole produce will go to labor as wages." 
This is true ; and whenever or wherever those condi- 
tions do or did exist the laborer received the least he 
ever got in the world. Witness the tribal communi- 
ties of Australia, India, and Africa, the Esquimaux, 
the Patagonians, and our American Indians. The 



64 WEALTH AND PROGRESS. 

facts on this point are too obvious to need re- 
counting, even to the most uninitiated observer. It Is 
a notorious fact in universal history that the nearer 
we find man to communal ownership of property, the 
nearer is he to savagery and starvation. I do not say 
that communal ownership of property is the cause of 
his barbarism, but manifestly it does not save him 
from it, as Mr. George would have us suppose. On 
this point Mr. George, like many others in whom 
sentiment dominates over reason, and feeling over facts, 
appears to assume that if the laborer receives all he 
produces he necessarily has one third more than when 
he only obtains two thirds of it.* Nothing could be 
farther from the facts in the case. In any state of so- 
ciety where the laborer receives all the product it is 
where he produces it all. And wherever all the wealth 
is produced by human labor and none of it by capital, 
i.e., by machinery, the whole product per capita is sure 
to be very small, as in India, China, Africa, Patagonia, 
Fiji Islands, etc. And wherever a large proportion of 
the wealth is produced by machinery or capital, the 
product per capita is sure to be very large, as in Amer- 
ica, England, and other machine-using countries. f 

If the laborer in the former countries got the whole 
product he would receive less than one tenth as much 
as the laborer in the latter countries would get if he 
only obtained half the product. 

As a matter of fact, it is universally true in all in- 
dustrial communities that where the laborer obtains 
the whole product he gets far less — often seven tenths 
less — than where he only obtains one half of it. It 
should always be remembered that wages are high 

* See Chapter I., Part I. f See Chapter II., Part I. 



THE FACTS ARE AGAINST THE THEORY. 65 

or low, the laborer is rich or poor, not according as he 
receives a large or small proportion of the total prod- 
uct, but according as the amount he actually receives 
is great or small. The wages of the laborer who, 
with the aid of machinery, produces four dollars' 
worth of wealth a day and receives two dollars, are 
twenty times (two thousand per cent) higher than those 
of the laborer who by hand labor produces ten cents' 
worth of wealth a day and gets it all. Therefore, 
while it is true that before land was " subject to pri- 
vate ownership" and rent began to be paid or capital 
was employed in production, " the whole product went 
to the laborer as wages," it is not true that wages were 
higher, but, on the contrary, that they were very much 
lower then than they ever have been since rent began 
to be paid. 

(2) Is it true that where private ownership of land 
obtains and rent is paid, that wages diminish or even 
stop rising as rent increases ? 

Not at all, but industrial data show it to be just the 
reverse. Rents are everywhere the highest in large 
cities, and it is precisely there where wages reach their 
maximum the world over without a solitary recorded 
exception. The same is true of agricultural rents. 
They are the highest in the vicinity of cities and man- 
ufacturing centres, and it is precisely there where the 
wages of agricultural laborers, as all industrial statistics 
show, are the highest in every country, even in India.* 
In fact, on this point Mr. George's theory is directly 

* See Buchanan's " Travels Through the Countries of Mysore, Ca- 
nara and Malabar," Vol. I., pp. 124, 125 ; Leone Levi's " Earnings 
and Wages," and Rogers's " Six Centuries of Work and Wages," 
p. 172, show the same to be true in England, and it is proverbially 
true in this country. 



66 WEALTH AND PROGRESS. 

opposed to all the known facts in the case in all coun- 
tries under normal economic conditions. 

(3) Is it true that wages " are fixed," as Mr. George 
avers, " by what the men could make if laboring for 
themselves" ? 

The answer to this question seems too obvious to 
need stating, and yet there is a large number of 
workingmen who have not the time or opportunity 
for study, or mental training necessary to enable them 
to master the subtleties of economics, who have been 
misled by the ingenuity with which it has been pre- 
sented, into accepting this statement, and to a consid- 
erable extent are regarding with favor the propositions 
for reform based upon in. Indeed, it would almost 
seem as if Mr. George himself believed the statement. 
After declaring that " this law of wages carries with it 
its own proof and becomes self-evident by mere state- 
ment," he says :* " The average man will not work for 
an employer for less, all things considered, than he can 
earn by working for himself ; nor yet will he work for 
himself for less than he can earn by working for an 
employer." With the obvious feeling that this logi- 
cally seals the case, he adds : " And hence the return 
which labor can secure from such natural opportunities 
as are free to it must fix the wages which labor every- 
where gets. 

Clearly Mr. George labors under the belief that he 
has here stated the proposition from the two opposite 
points of view, viz., that of both the laborer and the 
employer. But he has done nothing of the kind. In- 
stead of statins: the case for both the laborer and 



* " Progress and Poverty," p. 157, popular edition. The italics 
are ours. 



A DELUSIVE PRESENTATION. 67 

employer, as he thinks to do, he has in different 
phraseology merely stated the same thing twice for the 
laborer. 

True, " the average laborer will not work for an em- 
ployer for less, all things considered, than he can earn 
by working for himself. Nor yet will he work for him- 
self for less than he can earn by working for an em- 
ployer." But these statements only affirm what the 
laborer will or will not do. How about the employer? 
Will he give the laborer more than he can earn work- 
ing for himself? That is the question Mr. George did 
not ask — the true answer to which changes the whole 
face of the subject. If Mr. George could have shown 
that, as the laborer will not work for an employer for 
less, so the employer will not give him more than he 
can earn working for himself, the case would have 
been logically closed, and what the laborer could make 
working for himself would everywhere fix what he 
could get working for an employer. 

But this is exactly what he does not do, and for the 
best of all reasons, viz., that it is impossible to do it. 
Now, if it is true that the employer can and will pay 
the laborer more than he can get working for himself, 
then Mr. George's whole structure vanishes ; because 
in that case what the laborer could earn working for 
himself would have nothing whatever to do with decid- 
ing what his wages would be when working for another. 

Now, then, what are the facts ? Is it true, as Mr. 
George assumes, that the employer does not pay the 
laborer more than he could make by working for him- 
self ? Most certainly it is not true. 

Other things being the same, the average laborer 
will work for himself in preference to being employed 
by a boss. It is only because he can obtain more by 



68 WEALTH AND PROGRESS. 

working for another than by employing himself that 
he will consent to do so. Did the hand-loom weavers 
abandon their looms, and their wives and daughters the 
spinning-wheels, and go to work in the factory because 
they preferred to work for an employer ? Not at all ! 
On the contrary, they did everything in their power 
to avoid it. Indeed, it was to prevent this that the 
hand-loom weavers went from town to town in Eng- 
land in mobs breaking " steam -looms." They only 
consented to go into the factory when they were 
starved out by their productions being undersold by 
those of the factory. In other words, because the em- 
ployers would pay them more than they could earn 
working for themselves. 

If the wages of the spinners and weavers to-day were 
governed by what they could get by working for them- 
selves they would not receive one fourth of their pres- 
ent wages. The same is true of the wages in every 
other industry in which large capitals and machinery are 
employed. 

Is it true that the average workman, employed in the 
manufacture of hardware, pottery, furniture, glass, 
paper, carpets, silks, and broadcloths, the workers in 
gold and silverware, jewelry, brass, iron, tin, etc., the 
carpenters, masons, bricklayers, machinists, engineers, 
and the thousand-and-one other mechanics who work 
for employers, only obtain as much in wages as they 
could get by working for themselves, either in the same 
or any other occupations open to them ? The idea is 
so obviously opposed to the commonest facts of every- 
day experience, that to seriously mention it is to at 
once appear absurdly ridiculous. 

Is there any truth in Mr. George's last proposition, 
which he so confidently affirms, and upon the truth of 



THE THEORY HISTORICALLY BASELESS. 69 

which his whole theory depends, viz., that " where 
land is subject to ownership and rent arises, wages will 
be fixed by what labor could secure from the highest 
natural opportunities open to it without the payment 
of rent" ? Now, if there is any truth in this proposi- 
tion, the wages in all industries will be identical with, 
or, at least, very similar to, what the average laborer 
can obtain from the land which can be had for nothing. 
Clearly, if this were true, the wages of agricultural la- 
borers would at least be as high as those in any other 
industry, especially as they are the standard by which 
all others are " fixed." The notorious fact, however, 
is that they are everywhere the lowest. There is not 
a country in the world in which the wages of artisans 
are not higher than those of the laborers employed in 
agriculture. It is true in every country in continental 
Europe. In England the fact is simply notorious that 
the wages of the agricultural laborers there are little 
over one half those of mechanics and artisans. In this 
country the wages or incomes of the farm laborers and 
small farmers who work for themselves, as a class, are 
not only lower than in any other occupation, but in 
many cases they are nearly one half less. 

Again, if " the wages which labor everywhere gets" 
are fixed by what the laborer can secure from no-rent 
land, why are the wages of carpenters, painters, 
masons, bricklayers, tailors, printers, etc., higher in 
this country than they are in Europe, higher in New 
York than in smaller cities, and higher in large towns 
than in the rural districts, and everywhere higher than 
those of the farm laborer ? If the wages of the factory 
operative and those of the carpenter, painter, mason, 
and plumber are all " fixed" by what the average labor- 
er can secure from the best no-rent land, why are those 



70 WEALTH AND PROGRESS. 

of the former from seventy-five cents to one dollar a 
day less than those of the latter, or the wages of 
women everywhere so much lower than those of men ? 
Indeed, if wages were so determined these striking 
differences would be impossible. The facts nowhere 
sustain this absurd theory. Industrial data everywhere 
show that instead of wages being governed by or 
equal to what the laborer could get from land obtain- 
able rent free, they nowhere sustain any recognizable 
relation to it, and are everywhere much higher and 
frequently double that amount. 

It will thus be seen that in whatever way we con- 
sider Mr. George's theory of wages, we find it to be 
not merely inadequate to explain the facts, but every- 
where directly controverted by them. 



CHAPTER II. 

WAGES AND THE LAW OF WAGES. 
SECTION I. — Wages Defined. 

In any scientific or philosophic view of the subject, 
the true theory of wages must, as already observed, 
not only explain how the aggregate amount of wealth 
that goes to labor is determined, but it must also ac- 
count for the variations in the general rate of wages in 
different countries, industries, localities, etc., which, 
as we have seen in the last chapter, the popular theories 
have failed to do. In short, the true theory of wages 
must fully set forth the general principles upon which, 
under all normal, social, and economic conditions, the 
movement of wages takes place, and explain the law 
or order of that movement, and the social influences 
which tend to impel or retard it. 

Before attempting to discuss the law by which wages 
are governed, it may be well to explain what con- 
stitutes wages, or, at least, what we wish the term to 
be understood to mean when used in this work. This 
is the more necessary, because there is no general 
agreement, even among economists, as to the exact 
meaning which, in economic science, is to be attached 
to the term wages. It is held by some that everything 
is wages which a person receives in return for his labor. 
Because all wages are the return for labor, it is held 



72 WEALTH AND PROGRESS. 

that all return for labor is wages.* According to this 
signification of the term, if a man plants corn or 
catches fish, the corn raised or the fish caught, being 
the return for his labor, are his " wages," just as much 
as would be the amount he received when working for 
an employer for a stipulated sum. 

Now, this definition is not only inconvenient for the 
purposes of economic reasoning, but it is incorrect ; be- 
cause it regards two things as identical which are es- 
sentially different, both in fact and in the influences by 
which they are determined. It is true that the corn 
or fish and the amount paid by the employer are each 
the return for service, but the amount the laborer will 
receive under the two sets of circumstances is governed 
by different principles, and may be very different in 
amount. The fisherman or farmer who works for him- 
self receives the whole produce, be it little or much. 
Hence his income is decided wholly by the product of 
his own labor. But as the man who works for an em- 
ployer does not own the products of his labor, he 
receives as his reward a stipulated amount, which is 
agreed upon in advance, and which may be either more 
or less, but it is seldom the same, as the product. 
Thus, while the income of the former is determined by 
what his labor produces, that of the latter depends 
upon what another will consent to give for it. In 
other words, the man who works for himself sells the 
products of his labor, while he who works for another 
sells nothing but his labor, or service. Hence, the in- 
come of the former is the whole value of what his labor 
produces, while that of the latter is only the value or 
price of his labor as such, which is commonly and very 

* This is one of the first mistakes Mr. George makes in connection 
with wages, See " Progress and Poverty," p. 39, popular edition. 
Mr. Walker, however, does not make this mistake. 



COMMON-SENSE USE OF THE TERM WAGES. 73 

properly called wages. To confound these two kinds 
of income, which are thus essentially different in char- 
acter, and determined by different influences — one be- 
ing a contingent and the other a stipulated amount — 
must necessarily lead to confusion and error. There- 
fore, in order to avoid all misunderstanding on this 
point, I define wages as the value or price of labor, or 
service as such. Value* (price), in modern society, or 
wherever exchanges are made through the medium of 
money, is essentially the same, whether applied to 
commodities or labor. In economics value never ex- 
presses anything but the ratio in which different quan- 
tities will exchange for one another. Wages, the price 
or value of labor, therefore, is not what the laborer pro- 
duces, nor the value of that product, but what is actu- 
ally and consciously given in exchange for the service, 
per se. Robinson Crusoe might reap the full reward 
or product of his labor, but he could not have wages. 
For the same reason that there can be no value with- 
out exchange, there can be no wages — in the sense the 
term is here used — unless labor, as such, is bought and 
sold. 

Popular phrase, which is always the most direct 
avenue to the mind of the masses, has for once as- 
cribed the correct meaning to an important economic 
term, enabling us to use the word wages in the same 
sense that it is used in common language. This is al- 
ways important, but it is especially so in relation to 
the subject under consideration, that, more than all 
others, is the one in which " unlettered laborers " are 
most deeply interested ; hence they should be enabled 



* The discussion of the whole question of value and price, both of 
which relate to the ratio of exchange, will be found in the next volume. 

5 



74 WEALTH AND PROGRESS. 

to clearly understand it. We shall, therefore, through- 
out this work always use the term wages in the popu- 
lar sense — i.e., as expressing the price of labor, leav- 
ing it to those who desire to give the word a different 
signification to show that something will be gained in 
clearness by so doing. 

It will be observed that this definition of wages in- 
cludes the incomes, not only of the laborers who work 
by the day, by the week, or by the month, but those 
of all, without regard to sex or social status, who sell 
their services as such. That is to say, wages cover all 
stipulated, as distinguished from contingent, incomes 
which are received in exchange for personal services. 



Section II. — Real and Nominal Wages. 

Before passing to the consideration of the economic 
law by which wages are governed, it is important 
to distinguish clearly between real wages and nominal 
wages. The failure to recognize clearly the distinc- 
tion between these two kinds of wages is the cause of 
not a little of the chaos and confusion in which the 
question of wages has hitherto been all but intermi- 
nably involved. 

By ''Real Wages" is meant the actual amount of 
wealth (social well-being) obtainable for a day's labor. 
By " Nominal Wages" is meant the amount of money 
obtainable for a day's labor. The social well-being of 
the wage-receiving portion of the community — which 
is increasing as the complexity of society advances — is 
always infallibly indicated by the general rate of real 
wages. But this is not necessarily the case with nom- 
inal wages. Whether or not a rise in the rate of 



REAL AND NOMINAL WAGES. 75 

nominal wages indicate an improvement in the social 
condition of the wage-receivers depends entirely upon 
whether or not it is accompanied by an equal rise of 
real wages. This may or may not be the case. If, 
e.g. , nominal wages should rise from one dollar to one 
dollar and a half per day, and the price level of com- 
modities upon which those wages were expended rose 
in the same proportion, there would be no increase in 
real wages, because the one dollar and a half would 
exchange for no more of the various commodities 
than the one dollar previously did. Consequently, no 
more wealth could be obtained for a day's labor than 
before, and hence no improvement in the social well- 
being of the wage-receiver would ensue. And if, as 
is frequently the case, the rise in the price level should 
be relatively greater than that in the nominal wages, 
the amount of wealth procurable for a day's labor 
would be even less than before. Thus real wages 
would actually have fallen, while nominal wages rose 
fifty per cent. And, on the other hand, a fall of ten 
per cent in the price level would, other things being 
the same, constitute a rise of ten per cent in real wages 
without any change in nominal wages. 

It will thus be seen that nominal and real wages are 
not only not identical, but that they may either of 
them rise or fall without a similar movement in the 
other, and that it is only by the change of the latter 
that the economic and social condition of the masses 
is really affected. Therefore, the relation of real and 
nominal wages to each other and to the social condi- 
tion of the masses may be briefly stated as follows : 

(1) That the economic and social well-being of the 
masses is always indicated by the general rate of real 
wages, but not necessarily by that of nominal wages. 



76 WEALTH AND PROGRESS. 

(2) That the movement of nominal wages may or 
may not be identical with that of real wages ; and that 
it indicates a change in the social condition of the 
masses, only to the extent that it reflects the movement 
of real wages ; and 

(3) That, therefore, nothing can improve the social 
condition of the masses, whether it raises nominal 
wages or not, which does not increase the general rate 
of real wages, the degree of which may be universally 
taken as the accurate measure of social progress. It is 
therefore with the economic law governing real wages 
that the economist, the statesman, the social reformer, 
and, above all, the laboring classes are most deeply 
concerned. 

With this understanding of what constitutes wages, 
per se, and the distinction between nominal and real 
wages, we pass to the consideration of that still more 
important, nay, most important, question connected 
with social economics, viz., the law of wages. 



Section III. — The Economic Laiv of Wages. 

In order to observe distinctly the movement of wages, 
and understand the law by which it is governed, we 
must examine it in its earliest and simplest stages — be- 
fore it has become involved in the subtleties of com- 
plex social phenomena. Social industry in its progress 
to its present state has assumed three distinctive 
forms, which may be designated as savagery, slavery, 
and wages. Each of these industrial systems, so- 
called, had economic characteristics peculiar to it- 
self, one of which was the relation the laborer sus- 
tained to the product of his labor, and the condi- 



THE SLAVERY AND WAGES SYSTEMS. 77 

tions which determined the portion of it he should 
receive. 

Social progress being a growth or an evolution, its 
movement is necessarily gradual, and hitherto has 
been very slow. Accordingly, industrial systems come 
and go by insensible gradations ; and, while essentially 
different in their main characteristics, some of the 
features of each are naturally found to be common to 
all. Consequently, we find much in slavery that is 
common to savagery, of which it was the natural out- 
come. This is equally true of the wages system. Be- 
ing the outgrowth of the slavery system, it naturally 
possesses many of the same characteristics. 

Under both systems labor is an indispensable factor 
in the production of wealth. Under both systems the 
products belong to the master or employer, and not to 
the laborer. Under both systems labor is bought and 
sold, and as the service of labor is inseparable from the 
laborer, under both the presence of the laborer is es- 
sential to the delivery of the labor ; and as under 
slavery the master could not obtain the service of the 
slave without furnishing him with sufficient means to 
keep him in working condition, so under the wages 
system it is impossible for the employer to obtain the 
service of the laborer for less than will afford him a liv- 
ing.* Thus far the two systems are essentially the 
same ; but at this point a change takes place. New 
elements enter into the wages system which were un- 
known to that of slavery. While under both systems 
the employer, in order to obtain the service of the la- 



* This much is conceded by all leading economists, both English 
and Continental, and is what they have termed " natural " or " neces- 
sary" wages. 



78 WEALTH AND PROGRESS. 

borer, is compelled to give him as much of the product 
as will afford him a living, under slavery what should 
constitute the standard of that living could be deter- 
mined by the arbitrary will of the master. Under 
the wages system his standard of living is determined 
by the extent of his habitual wants and desires (i.e., 
the complexity of his social character), which may be 
and are constantly increased according to the extent 
and complexity of his social environment. 

Although under both systems labor is bought and 
sold, under slavery, in order to obtain the service, or 
labor, the master bought the laborer as a commodity. 
Under the wages system he buys only the labor as ser- 
vice. The result of this new feature is that the person 
of the laborer not only ceases to be the object of the 
sale, but, instead of being the sold, as under slavery, 
he becomes the seller. In other words, the employer, 
under wages, instead of buying and selling laborers, 
as under slavery, buys service and sells products, and 
the laborer sells service and buys products. Thus, 
service, instead of persons, began to be exchanged, and 
the value or price was transferred from the laborer to 
his labor* Thenceforth the laborer ceased to be a 
commodity, and became a distinct social as well as an 
economic factor, which constitutes the essential differ- 
ence, as we shall hereafter see, between the two in- 
dustrial systems. 

It will thus be observed that during the social differ- 
entiation in which slavery was superseded by wages, 

* It will be observed that it is at this point that the interest of the 
purchaser of labor, as such, ceases to reside in the personality of the 
laborer. Whether he lives or dies is no longer a matter of any im- 
portance to the buyer or employer of labor, because he now only pays 
for the service the laborer actually renders or delivers. 



THE LAW OF ECONOMIC PRICES. 79 

service, as such, for the first time became an economic 
entity, possessing value, and, consequently, subject to 
the social laws of exchange. We have seen* that under 
savagery the amount of wealth the laborer obtained — 
which was the smallest he ever got — was determined by 
what he produced, because he owned both the labor 
and the product, such as it was ; that, under slavery, 
the amount was determined by the master, for the 
same reason, viz., that he owned both the laborer and 
the product. How that is determined under the pres- 
ent system, where the ownership of labor or service 
and that of the product are separated, the laborer hav- 
ing possession of the former and the employer that of 
the latter, and each being able to obtain what he gets 
from the other only by means of exchange, is now the 
question. 

Manifestly, labor being now subject to all the con- 
ditions of exchange, its price (wages) must necessarily 
be determined by the same general law governing that 
of all other things in the domain of exchange. There- 
fore, in seeking the economic law of wages, we are 
really seeking the law of prices. 

The full discussion of prices (value), exchange, 
etc., in relation to commodities, will be found in an- 
other part of this work, which, for reasons already ex- 
plained, will be published separately, f For our pres- 
ent purpose, therefore, we shall only briefly state the 
law there elaborately established, and then apply it to 
wages. It affirms : 

(1) That value in economics refers exclusively to 
the domain of exchange and includes both com- 
modities and services, and always expresses the ratio 

* Chapter I., Part I. f See preface. 



8o WEALTH AND PROGRESS. 

in which quantities, whether of commodities or ser- 
vices, or both, will exchange for one another. 

(2) That the ratio in which quantities of different 
commodities will exchange for one another is not deter- 
mined by supply and demand, as popularly taught, but 
that it is primarily governed by the cost of production. 

This doctrine does not mean that the price at which 
each article is actually sold is determined by the cost 
of producing that particular article. In that case there 
would be no profits, as everything would be sold for 
exactly what it cost to make it ; or, if a specific rate 
of profit is included in the cost, the actual price of 
every individual article would vary precisely according 
to the difference in the cost of making it ; in which case 
everybody would obtain exactly the same rate of 
profit. Hence there would be no losses, and, conse- 
quently, no failures or bankruptcies ; but we know that 
there are profits, and that they are not uniform ; 
that in some cases they are very large and in others 
very small, and that there are many losses, failures, and 
bankruptcies.* What we mean by saying that prices 
are determined by the cost of production, is that the 
general price of any given class of articles is determined 
by the cost of producing or replacing that portion of 
the necessary supply of that commodity which is pro- 
duced under the greatest disadvantage. In other 
words, the normal price of any commodity in a given 
market is determined by the cost of producing the 
most expensive portion of it. Nor is the reason for 
this difficult to understand. No one can continuously 
sell an article for less than it costs to produce it ; con- 
sequently, that portion of the general supply of a com- 

* It is estimated that over ninety per cent who go into business fail. 



THE LAW OF PRICES ILLUSTRATED. 81 

modity which costs the most to produce it must be 
sold at a price high enough to at least cover the cost 
of its production. The price at which the most ex- 
pensive portion of the general supply must be sold is, 
of course, that at which the balance can be sold. 
And, as no one will voluntarily sell for less than the 
highest price he can with certainty obtain, it follows 
that the balance will be sold at that price. Conse- 
quently, that portion of the necessary supply of a com- 
modity which, from closer proximity to the market, 
improved machinery, easier access to the raw material, 
or whatsoever, is produced at less than the maximum 
cost, yields a proportionately larger profit. 

Suppose, for example, that A, B, C, and D supplied 
a given market with shoes of a certain quality ; and 
suppose, also, that A, with the capital, tools, etc., at 
his command, can barely make these shoes and get his 
own back at one dollar a pair, and that B, C, and D, 
through larger capital, superior machinery, favorable 
location, or any other cause, can furnish the same grade 
of shoes at ninety-five, ninety, and eighty-five cents a 
pair respectively. Now, it is very clear that A must 
sell his shoes at one dollar a pair or leave the business. 
If A can sell his shoes at one dollar a pair, there is no 
economic force to prevent B, C, and D from selling 
theirs at the same price. True, they could afford to 
sell theirs at less than A, but as they have nothing to 
gain, and five, ten, and fifteen cents a pair respectively 
to lose by so doing, they cannot be expected to do so. 
In fact, they will not do so as long as they can sell 
their whole product at one dollar a pair. 

Suppose, however, D, seeing that by increasing his 
sales one fourth he could enlarge his factory or put in 
improved machinery, and in this way be able to 



82 WEALTH AND PROGRESS. 

produce the shoes two and a half cents a pair cheaper, 
actually increase his aggregate profits, and sell the 
shoes five cents a pair lower, and, in order to .under- 
sell his competitors and accomplish this object, he 
should reduce the price of his shoes to ninety-five cents 
a pair ? Now, other things being equal, people will 
not give one dollar a pair for shoes when they can get 
them for ninety-five cents ; therefore, in order to sell 
their shoes, C, B, and A must compete with D and re- 
duce the price. As C and B had ten and five cents a 
pair profit respectively, they can afford to do so by 
lowering their profits ; but A, who was getting no 
profits — his shoes costing him one dollar a pair to make 
them — could make no reduction in the price ; hence, he 
is undersold and driven from the market. Now that 
A is gone, B's product becomes the most expensive 
portion of the necessary supply. The minimum at 
which B can make shoes being ninety-five cents a pair, 
so long as his shoes are needed ninety-five cents a 
pair must be paid for them ; and for the same reason 
that B, C, and D could sell for a dollar a pair so long 
as A's product constituted a part of the necessary sup- 
ply, C and D can sell at ninety-five cents, and that will 
therefore be the normal price of the shoes so long as 
B's product, which is now the most expensive portion 
of the supply, continues to be required. This is what 
is constantly taking place in every open market in the 
world. 

This law, which is fully explained elsewhere,* affords 
an adequate explanation of the constant tendency of 
prices of a given commodity toward a common level — ■ 
the great difference in profits in the same industry — 

"* See chapter on " Price and Profits," Vol. II. 



THE LA W OF PRICES APPLIED TO LABOR. S3 

the losses, failures, and bankruptcies — the constant 
tendency toward the concentration of capital into large 
enterprises, and the consequent crowding out of small 
ones, with other familiar phenomena in the world of 
prices and profits, that are inexplicable upon any other 
theory. 

It will thus be seen that the normal price of any 
commodity is determined by the cost of production, 
which includes reproduction, but not the cost of mak- 
ing or replacing each particular article, nor the average 
cost of making that kind of article, but by the cost of 
making or replacing that portion of the necessary sup- 
ply which is produced at the greatest cost. 

Having found the law of prices (of commodities), 
let us apply that law to labor, and see if it will afford 
an adequate explanation of the multifarious and hith- 
erto inexplicable phenomena in the sphere of wages. 
It will be remembered that in economics, when using 
the term " law" we do not use it as applying to exact 
quantities, but only to general tendencies. Hence, 
when speaking of the " law of prices" or the " law of 
wages," we only mean the law which determines the 
tendency of prices or wages to move in a given direc- 
tion. According to the principle we have been con- 
sidering, the law of prices is, " that under normal con- 
ditions" the price of commodities always tends toward 
the cost of production. Applied to labor, then, this 
law is, that the price of labor (wages) constantly 
tends toward the cost of producing labor or service. 
By the cost of a thing, it will be remembered, is al- 
ways meant what its owner gave for it, or would have 
to give to replace it. Now, what constitutes the cost 
of labor to its owner, the laborer ? Obviously the cost 
of his living. Upon the same principle that producers 



84 WEALTH AND PROGRESS. 

cannot or will not consent to continuously sell a com- 
modity for less than it cost to produce it, or than it 
would cost to replace it, the laborer cannot or will not 
long consent to sell his services for less than it cost 
him — i.e., for less than will afford him a living. The 
cost of labor to the laborer, therefore, is the cost of his 
living ; and, other things being the same, the cost of 
his living will be determined by the number of his 
habitual wants. 

It is not only true that the laborer cannot or will 
not continuously sell his labor for less than it costs him, 
i.e., for less than will supply his socially established 
wants, but it is equally true that he cannot for any 
considerable time together sell it for more than that 
amount. 

All economic movement may be expressed, as Bastiat 
truly observes, in " Wants, Efforts, and Satisfactions." 
This statement not only composes the course of eco- 
nomic movement, but it also expresses the order in 
which it takes place, (i) Wants, (2) Efforts, (3) Sat- 
isfactions. Want supplies the motive, effort the action, 
and satisfaction is the result. Thus, the only end and 
aim of effort is satisfaction of some want or desire ; no 
effort is ever put forth for any other purpose. 

Want is thus not only the sole motive, but it is also 
the only measure of effort. For the same reason that 
no effort will be put forth except to satisfy some want, 
no more effort will be put forth than is necessary to sat- 
isfy that want. It is in obedience to this principle that 
we refuse to give something for nothing, or object to 
pay for that which we can have free. It is through 
the operation of the same principle that man every- 
where endeavors to obtain the maximum result for the 
minimum effort, as is exemplified in every division 



ARBITRARY RISE OF WAGES IMPOSSIBIE. 85 

of labor and improvement in the methods of produc- 
tion. Wants being thus the motive and measure of 
effort, and wages the price given for the effort, mani- 
festly the laborer's wages can never be permanently 
much above his wants, as expressed in the standard 
of his living. Not only is there no motive for him to 
push the price of his service above the level of what 
would satisfy his wants,* but if it was arbitrarily raised 
above that point without his aid it could not long re- 
main so. If, for instance, the general rate of wages in 
any community should be arbitrarily increased by law 
or other means twenty-five per cent above the habitual 
wants — the established standard of living — in the very 
nature of things it could only be of temporary dura- 
tion. It could never become permanent, because the 
very rise itself would set forces in operation that 
would neutralize it. 

Assuming the standard of living to remain the same, 
wages would ultimately be adjusted to the wants in 
one of two ways : either the rate of wages per day or 
week would fall or the laborer would work fewer days 
in the week or fewer weeks in the year. Never hav- 
ing an incentive to work except to satisfy his wants, 
he will refuse to work more days than under ex- 
isting conditions is necessary to enable him to obtain 
the wherewithal to satisfy those wants, for the same 
reason that he will not give two dollars for what he 
can get for one. 

Consequently, if the rate of wages per day was not 
reduced by the employer, the same result would be 
reached by the number of days' work being reduced by 
the laborer. 

* For a definition of economic wants see Chapter IX., Sec. I., Part II. 



86 WEALTH AND PROGRESS. 

An arbitrary increase of wages, such as is here sup- 
posed, would never become general in any community, 
for two reasons : (i) Because there is never, under nor- 
mal economic conditions, sufficient disposable wealth in 
the hands of the employer to enable him to make any 
very considerable rise in the general rate of wages with- 
out an increase in production. (2) Because if such 
disposable wealth were at hand, there is no conceivable 
motive to induce him to give it to the laborer unless 
he (the laborer) desires, nay, demands it, which noth- 
ing but an increase in his wants (his cost of living) can 
induce him to do. 

But, while neither the means nor motives ever exist 
for making such a thing general, they may and have 
existed for making it occur locally ; and wherever it 
has been tried the results have been as we have indi- 
cated. 

Thus, the experience of Mr. Brassey with the coolies 
in India, as related by his son, Sir Thomas,* was that 
" On the railways of India it has been found that the 
great increase of pay which has taken place has neither 
augmented the rapidity of execution nor added to the 
comfort of the laborer. The Hindoo workman knows 
no other want than his daily portion of rice, and the 
torrid climate renders water-tight habitations and ample 
clothing alike unnecessary. The laborer, therefore, 
desists from work as soon as he has provided for the 
necessities of the day. Higher pay adds nothing to 
his comforts ; it serves but to diminish his ordinary 
industry." 



* " Work and Wages," pp. 88, 89. See also Smith's " Wealth of 
Nations," p. 55 ; Hearn's " Theory of Efforts to Satisfy Human 
Wants," pp. ig ; 20. 



AN ERRONEOUS VIEW OF HIGH WAGES. 87 

In fact, it is because it has been observed that a 
sudden rise of wages, which is always arbitrary, is 
generally followed by idleness, dissipation, etc., among 
the laborers, it has been commonly held that " high 
wages leads to drunkenness and vice. " This view is 
not only held by employers, who eagerly embrace it 
as a defence for their refusal to increase or their efforts 
to reduce wages, but it is quite commonly held by 
philanthropists, moralists, editors, and even some 
economists. This error arises from the failure to dis- 
tinguish between arbitrary and economic wages. In a 
word, when the dollar comes before the want it is very 
liable to be wasted ; when it comes as the result of the 
want it is sure to be utilized. 

Thus, from whatever point of view we consider the 
question, there is no escaping the result that real 
wages always move toward the level of the wants ; or, 
in other words, the price of labor is finally governed 
by the standard of living — the cost of its produc- 
tion. The evidence of the truth of this is so universal 
that no modern writer of note has failed to notice it in 
some form or other," although it appears to have been 
almost wholly ignored in the generalizations of even 
the most careful economists. Why so important a 
phenomenon, that is observed by all, should fail to find 
a place in the theory of any economist, is, indeed, diffi- 
cult to understand. 

* " From whatever point of the political compass we may set out 
at first, we shall find that the cost of production is the grand principle 
to which we must always come at last. It is this cost that determines 
the natural or necessary rate of wages, just as it determines the aver- 
age price of commodities." — McCullocli s " Principles of Political 
Economy," p. 17S. See also Ricardo's " Principles of Political Econ- 
omy and Taxation," pp. 52, 75, 93. Also " Wealth of Nations," 
Book V., ch. 2, pp. 690-93. 



88 WEALTH AND PROGRESS. 



SECTION IV. — The Standard of Living. 

Having seen that the price of service (wages), like 
that of everything else in the sphere of exchange, is 
ultimately determined by the cost of production, and 
that the cost of producing labor is determined by the 
socially accepted standard of living, it may be well to 
define a little more clearly what is meant by the " so- 
cially accepted standard of living. ' ' By this expression 
is meant that state of material comfort and social re- 
finement which is customary, and therefore demanded 
by the social status of the class to which one belongs, 
and below which he cannot go without being put to 
social disadvantage. 

Again, the standard of living as here stated must 
never be understood to mean that of the single indi- 
vidual, but always that of the family. Nor does this 
mean that the wages of the worker in each family are 
determined by the cost of living in that particular fam- 
ily. In that case there - could be neither bank accounts 
nor bad debts incurred among the wage-receivers, the 
income of each family being always exactly the same 
as its expenditures. Nor could there be any general 
rate of wages in any industry, class, or country, if this 
rule obtained, because in every variety of expenditure 
in the individual family, whether caused by a higher 
or a lower standard of living, a larger or a smaller 
family, extravagance or economy, waste or penurious- 
ness, would then cause a corresponding variation in 
the income of each family. Thus the expenditure in 
each family would be a law of wages unto itself. 
Again, other things being the same, where there were 
two workers in a family the wages of each would only 



THE TRUE THEORY OF WAGES STATED. 89 

be half what they would be were there only one, all of 
which we know is contrary to experience. 

Then in what sense does the cost of living determine 
wages ? In exactly the same sense that the cost of 
production determines the prices of commodities, 
which, it will be remembered, is by the cost of produc- 
ing the most expensive portion of the necessary sup- 
ply. Therefore, we say the chief determining influoice 
in the general rate of wages in any country, class, or in- 
dustry, is the standard of living of the most expensive 
families furnishing a necessary part of the supply of 
labor in that country, class, or industry. 

The reason for this is very clear. The laborer can- 
not and will not work for less than that which will 
furnish him a living. He will, as experience shows, 
often work for less than what will supply him with ex- 
ceptional comforts and luxuries, but he will not con- 
tinuously work for less than will furnish him with that 
which, by constant repetition and the force of habit, 
have become necessities. Before he will forego these 
he will refuse to work, and inaugurate strikes, riots, 
and other means of endangering the peace and pros- 
perity of the community. 

If two dollars per day is the minimum amount 
upon which a certain portion of a given class of la- 
borers can or will consent peacefully to live, then 
that amount must be paid them in order to obtain 
their labor. What the most expensive portion of a given 
class must receive, the balance may and therefore will 
receive. In other words, the minimum amount upon 
which the most expensive laborers will consent to 
live determines the general rate of wages in that 
class ; and what they will consent to live upon is 
equally determined by the number of their habitual 



90 WEALTH AND PROGRESS. 

wants, or the complexity of their social life. To re- 
capitulate then : (i) Wages are the price of labor. 
(2) The price of labor is governed by (moves tow- 
ard) the cost of its production — i.e., the cost of pro- 
ducing the most expensive portion of the necessary 
supply. (3) The cost of producing labor is de- 
termined by the standard of living of the family. 
(4) The standard of living is determined by the 
habitual wants and customs or the social character of 
the people. 

Only this theory will explain why wages are higher 
in one country than in another ; why the wages of 
skilled laborers in some places are lower than those of 
unskilled in others ; why agricultural wages, the world 
over, are lower than those of the mechanics and arti- 
sans ; why some laborers, even of the lowest grade, 
can save money, while at the same time the best por- 
tion of their class can hardly make a living ; why the 
best portion, and often those who earn the most, as 
a general thing, are the most discontented and fre- 
quently the leaders in strikes ; all of which has hitherto 
been an economic enigma. 

From this view the objectionable features to what 
has been termed the " iron law of wages" entirely 
disappear. The idea that under this iron law wages 
cannot rise, that they constantly tend, as Henry 
George and Continental Socialists affirm, "to a mini- 
mum which will give but a bare living," i.e., barely 
sustain physical existence and reproduction, will be 
seen to be wholly erroneous. In truth, there is noth- 
ing " iron 9 about it ; on the contrary, it is as elastic 
as human wants and desires, and capable of as much 
expansion as the social character of man. There is 
nothing in this law to prevent the general rate of wages 



THE "IRON LAW OF WAGES" FALLACY. 91 

from rising to $5000 as well as to $500 a year. If it 
were true, as is generally assumed, that wages, when 
tending toward the cost of living, tend toward the 
minimum upon which that portion of the laborers could 
live who live the cheapest, then all the horrors de- 
picted by Lassalle might be realized. In that case it 
would be only those whose social habits were the sim- 
plest, who would receive sufficient means to gratify 
their wants. All those whose habitual wants are 
most varied and expensive would be unable to obtain 
sufficient to satisfy their normal needs, and hence 
would be in a constant state of want and misery verg- 
ing on desperation. Were this " iron law of wages " 
view correct, it would indeed merit all the damnation 
which Lassalle, Proudhon, Bakunin, Marx, and others 
have heaped upon it. To abolish an industrial system 
of which such a law is a necessary part, would justify 
revolution — even to overthrowing all existing social 
and political institutions ! 

Were this pessimistic doctrine correct it would, of 
course, also obtain in the sphere of commodities, 
and consequently prices would be determined by the 
cost of producing that portion of the supply which 
cost the least. In this case those who produced the 
cheapest would sell at cost, and all others who could 
not produce as cheaply as the lowest would have to sell 
at a loss, and there would be nowhere any profits. In 
the sphere of wages this law would fix the price of la- 
bor at what would furnish but the bare necessities of 
those (in that class) who could live on the least ; and 
all whose cost of living was above that point would be 
in debt, want, and degradation. It is hardly neces- 
sary to say that such a state of things never existed 
in any community. It is an inversion arising from a 



92 WEALTH AND PROGRESS. 

misconception of one half of the relation that the cost 
of living sustains to wages.* 

While it is true that the price of labor (wages), like 
that of everything else, tends toward the minimum 
cost of production, it is the minimum cost not of the 
cheapest, but of the dearest, portion of the necessary 
supply. This makes all the difference between what 
really is, and what would be, the case if the " iron law" 
view were correct. In this, the true view of the case, 
in the sphere of commodities, the normal prices being 
determined by the cost of producing the most ex- 
pensive portion of the supply, clearly all who by their 
superior skill, or by the aid of machinery and tools, 
produce commodities at less cost than the most ex- 
pensive, can have the difference as profit ; conse- 
quently, instead of all producing at a loss except those 
who can produce the cheapest, and nobody having any 
profits, everybody has a profit except those who pro- 
duce the most expensive portion of the necessary 
supply, and this is what is universally taking place. 

So it is with wages. Instead of the rate of wages 
in any class being determined by the cost of living of 
those who live the cheapest, the reverse is true ; it 
being governed by that of those whose cost of living 
(for the family) is the highest ; they constituting the 
most expensive portion of the supply. Consequently, 
instead of all laborers in a given class whose standard 
of living is higher than the lowest in that class, neces- 
sarily (when in steady employment) being constantly 
in want, debt, and difficulty, the case is exactly the 

* It is especially strange that F. A. Walker, who more clearly than 
any economist has recognized the operation of this law in the sphere 
of commodities, should have failed to observe its equally obvious ap- 
plication in the domain of wages. 



WAGES FIXED BY THE DEAREST LABORERS. 93 

reverse. It is only that portion of the class whose 
cost of living is the greatest that are in that condition, 
and all whose cost of living, from whatever cause, is 
lower than the highest can indulge in extras or save 
money. 

And the reason for this is not difficult to understand. 
We know that the general rate of wages in the same 
industry and locality is nearly uniform. We know, for 
instance, that weavers, spinners, shoemakers, carpen- 
ters, bricklayers, etc., working in the same shop or 
factory, or on the same job, get the same rate of pay 
for work at their respective trades, whether they are 
single or married, have large or small families, or live 
more or less expensively than their fellow-laborers. 
We also know, for reasons already given, that the 
most expensive among them must obtain for his ser- 
vice that which will supply his family with what to 
them (as a class) are the necessities. What will be 
sufficient to supply the urgent necessities of the most 
expensive portion of any class of laborers, to induce 
them to continue to work, will furnish all those whose 
cost of living is less with a margin proportionate to 
the difference, which maybe spent in what to them are 
luxuries — dress, amusements, pictures, etc. 

This explains why we always find those whose fami- 
lies are largest, or those who have more cultivated 
tastes and wants, and, therefore, their cost of living is 
higher than the great mass of their class, are constantly 
chafing under the pressure of their unsatisfied demands. 
This pressure increases in severity in proportion as the 
standard of living rises above that of the average. 
Consequently, we find in every class of laborers a por- 
tion who are in almost perpetual rebellion against the 
smallness of their wages, and what to them is almost 



94 WEALTH AND PROGRESS. 

unendurable poverty ; while the single men, and those 
whose families are smaller, or who maintain a lower 
standard of living, while receiving the same wages, can 
either save money or use it in dissipation. 

This is the reason why the Asiatic and European 
laborer can come here and accumulate wealth (or dis- 
sipate *) upon wages which will supply the American 
laborer's family with only the bare necessities ; as 
can be seen in the fact that a large majority of the 
wage-receivers who own their homes or have bank 
deposits (so commonly regarded as evidence of thrift 
and superior character) are foreigners and the children 
of foreigners. It is only because of the laborer's habits 
of life — his standard of living being lower than those 
of the highest of his class — that he is able to save at all. 
Accordingly, we almost always find, other things being 
the same, that the home appointments, sanitation, 
and the social relations of the wage-receivers who 
own their homes— -mere shanties most of them — are 
quite inferior to those of their class who hire their 
homes and have no bank deposits. If the possession 
of a bank account, or the ownership of what is so pat- 
ronizingly styled " a little home," is the evidence of 
superior character in those who acquire them, why did 
they not give the same kind of evidence in their own 
country ? It maybe replied that it is because the gen- 
eral rate of wages there was so low that it left no 
margin above what would give them a bare living. 
True, but why is there no margin in their own coun- 
try ? Why is there no margin for the best class of 
Chinamen in China, of Germans in Germany, English- 



* In 1880 thirteen per cent of our population were foreigners, and 
they furnished thirty per cent of our criminals. 



WHY FOREIGNERS CAN SA VE MONE Y HERE. 95 

men in England, and Americans in America, while 
there is a margin in almost any country in Continental 
Europe for the Asiatic, a margin in England for both 
the Asiatic and Continental laborer, and a margin in 
the United States for the laborers of every other coun- 
try, but no margin for the American laborer in any 
country in the world ? The answer is very clear. 
There is no margin upon which the best class of labor- 
ers can save in their own country simply because there 
the general rate of wages is determined by their own 
standard of living. They can get wages which will leave 
them a margin over the cost of living, only by going 
where the price of labor is determined by a social 
character and standard of living higher than their own ; 
or, if in their own country, by adopting a standard 
of living lower than the highest of the class to which 
they socially belong. Why the foreign laborer, who 
can hardly procure a living at home, can accumulate 
here, while the American laborer can only obtain suffi- 
cient to satisfy his normal social needs, is for the first 
time explained by the operation of this economic law. 
And should the standard of living of the American 
laborer ever be reduced to the level of that of the 
European or Asiatic, then it would be as impossible 
for the foreign laborer to save money here as at home, 
and for the same reason. 

It will thus be seen that the rate of wages, and, con- 
sequently, the social prosperity of the masses, is not 
kept up and promoted by the influence of those whose 
standard of living is below the maximum or the aver- 
age, but by the constant pressure of the unsatisfied 
desires of those whose standard of living is the highest 
in their class. In other words, social progress and civ- 
ilization are promoted, not so much by saving as by 



96 WEALTH AND PROGRESS. 

consuming wealth. Those who save, especially among 
the wage-receivers, are enabled to do so, other things 
being the same, solely because others consume. If 
everybody saved, who would consume ? and if nobody 
consumed, who could save ? 

Thus it is that, in accordance with the same principle 
that production is finally determined by consumption, 
the laborer's income, under wage-conditions, is gov- 
erned by his expenditures. In other words, the stand- 
ard of living is the economic law of wages. 



Section V. — The Cost of Living. 

The cost of living is a resultant of two factors : 

(1) The price of the commodities the laborer consumes ; 

(2) The quantity of commodities which enter into his 
habitual daily consumption. The former affects the 
money cost of living, and the latter the actual stand- 
ard of living. 

An increase in prices would be a rise in the cost 
of living, but not a rise in the standard of living. It 
would increase the wages but not the wealth the 
laborer receives for a day's services. It would be a 
rise of what we defined as " nominal wages," but not 
a rise of real wages. An increase in the habitual 
wants involving an increase in the number of commod- 
ities habitually consumed would constitute a rise in 
the standard of living ; it would increase the amount 
of wealth the laborers would receive for a day's work, 
and would therefore constitute a rise of what we de- 
fined as real wages. It will be seen that while nominal 
wages will always rise with a rise in the cost of living, 



PRICES AFFECT NOMINAL, NOT REAL WAGES. 97 

it will only represent more wealth for the laborer when 
it is accompanied by a rise in the standard of living, 
which is real wages. It may therefore be laid down 
that the general rate of real wages always tends toward 
the standard of living, and that nominal wages al- 
ways tend toward the cost of living. 

From this it follows that, prices being the same, 
wages will vary according to the standard of living — 
i.e., according to the quantity and variety of com- 
modities which enter into the laborer's normal daily 
consumption ; and the standard of living being the 
same, wages will vary according to the price of com- 
modities. 

It should be observed, however, in this connection, 
that although any permanent change in the cost of liv- 
ing will surely be followed by a corresponding change 
in wages, it does not follow that if the cost of living 
should change, from a sudden rise or fall of prices, that 
the change in nominal wages would be equally sudden. 
If, for instance, the cost of living should be increased 
by a sudden rise in prices, wages would not immedi- 
ately rise in the same ratio, but they would be sure to 
begin to move in that direction ; and if the rise in 
prices became permanent, the wages would finally be 
adjusted to them. In the same way, if prices should 
suddenly fall, wages would not immediately fall in the 
same proportion, but they would soon begin to gravi- 
tate in that direction ; and if the low prices became 
permanent, wages would ultimately fall to the same 
extent. Consequently, the variation between wages 
and the cost of living produced by such causes can 
never become permanent ; they are merely accidental 
perturbations which can only exist during the time 



98 WEALTH AND PROGRESS. 

necessary for the wages to become adjusted to the new 
prices.* 

Whether the laborer will lose or gain by such a 
change will depend upon whether prices rise or fall. 
If they rise he is the loser until his wages have 
also risen, and if they fall, he is the gainer until his 
wages are reduced in the same ratio. This is an im- 
portant distinction which should never be lost sight 
of, and to which we shall have occasion to refer more 
at length hereafter. Therefore, if the doctrine we 
have laid down is sound, and our generalizations are 
correct, the proposition that wages are determined 
by the cost of living will be in full accord with all ex- 
perience under wage-paying conditions. Wherever 
wages constitute the sole or main income of the labor- 
er, the general rate of wages will always be found to 
sustain a general uniform relation to the cost of sup- 
plying the laborer's wants according to the socially ac- 
cepted standard of living. 



* This is the case when any sudden change in prices and wages oc- 
curs as the result of a variation in the value of money. Witness the 
inflation period in this country during our Civil War, and the subse- 
quent contraction of the currency. 



CHAPTER III. 

THE SIMILARITY OF WAGES IN ASIA AND EUROPE IN 
THE THIRTEENTH CENTURY. 

THE theory of wages presented in the previous chap- 
ter, if sound, should afford an adequate explanation of 
wage-phenomena under all conditions. According to 
this doctrine, wherever it is possible to trace the gen- 
eral rate of wages and the cost of living from century 
to century, or from generation to generation, we ought 
to find that they sustain a general uniform relation 
to each other. Do the facts sustain the theory ? Let 
us see. 

If we can accept the universal testimony of travel- 
lers and historians, the cost of living among the labor- 
ing classes in the leading countries in Asia, Africa, and 
South America, has always been exceedingly low, and 
their wages, so far as wages have been paid at all, 
have ever been correspondingly small. In India the 
working class, or " lower ranks," called the " sudras," 
which compose the great mass of the people, live 
mainly upon rice, ragi or millet, with salt and occa- 
sionally a little oil or chili for seasoning. 

This diet can be supplied for about three or four cents 
a day. " A quantity sufficient for two meals," says 
Gibson, " can be purchased for a half penny" (one 
cent).* Turner, who made an extensive tour through 

* "Indian Agriculture," in Journal of Asiatic Society, Vol. III., 

p- IO °- LofC. 



ioo WEALTH AND PROGRESS. 

Bengal in the last quarter of the eighteenth century, 
speaking of the cost of living among the common peo- 
ple, says : " The value of this can seldom amount to 
more than one penny a day, even allowing him to 
make his meal of two pounds of boiled rice, a due 
proportion of salt, oil, vegetables, fish and chili."* 
" From the earliest period to which our knowledge 
of India extends," says Buckle, f " an immense ma- 
jority of the people, pinched by the most galling pov- 
erty, and just living from hand to mouth, always have 
remained in a state of stupid debasement." 

The truth of this is also shown by the fact that in 
most parts of India it is established, both by law and 
custom, that if a laborer is unable to pay his debts, 
which is a common thing, he or his wife and children, 
if he has any, become the property of the creditor, 
and by this means, in many places, a large portion of 
the laborers have become slaves.;}: 

Nor is this exceptional. Turner declares§ that "the 
lower ranks without scruple dispose of their children 
for slaves to any purchaser, and that, too, for a very 
trifling consideration ; nor yet, though in a traffic so 
unnatural, is the agency of a third person ever em- 
ployed. Nothing is more common than to see a 
mother dress up her child and bring it to the market 
with no other hope, no other view, than to enhance 
the price she may procure for it." 

If we had no other evidence of the simple life, low 
wages, and consequent social degradation of the masses 

* " Embassy to the Court of Thibet," p. n. 
f " History of Civilization," pp. 52, 53. 

\ Buchanan's " Journey Through the Countries of Mysore, Canara 
and Malabar," Vol. II., pp. 320-562. 

§ " Embassy to the Court of Thibet," pp. 10, 11. 



WAGES IN INDIA. ioi 

in India, it is fully shown in their civil and religious 
code, the " Institute of Menu,"* which, we are told, 
" is still the basis of Hindu jurisprudence, and the 
principal features remain to the present day." f Ac- 
cording to this remarkable code a sudra (laborer) has 
no rights that any superior is bound to respect. For 
the slightest offence to a Brahmin he can be cruelly 
tortured or put to death. For him to read, or even 
listen to the reading of the sacred books, is a most 
heinous crime, visited by terrible penalty, and he is ex- 
pressly forbidden to attempt to accumulate wealth.^ 

But we are not confined to these general statements 
for evidence that wages and the cost of living in India 
go hand in hand. Buchanan, unlike most travellers 
in that country, did not content himself with a mere 
general survey of the social and industrial condition 
of the laboring classes, but in each place he visited he 
took special pains to ascertain how the people lived 
and what their living cost. Also how much they were 
paid, and what they were paid in — whether in goods 
or in money ; also the kind of money, and its value in 
gold.g 

* The " Institute of Menu," Buckle thinks, was drawn up about 
900 B.C., but some writers have put it at a much more ancient dale. 
See also the works of Sir W. Jones. 

f Elphinstone's " History of India," p. 83. 

% Buckle's " History of Civilization," Vol. I., pp. 56, 57. 

§ According to Buchanan, wages in India range from six to nine 
cents a day in gold ; fifty to fifty-five cents a month when the laborer 
gets one meal a day from the master, etc. 

For an extensive statement of wages and the cost of living in India, 
which we regret we cannot spare the space to quote, the reader is re- 
ferred to his " Journey Through the Countries of Mysore, Canara 
and Malabar," Vol. I., pp. 124, 125, 133, 171, 216, 217, 298, 390, 415 ; 
Vol. II., pp. 12, 19, 22, go, 108, 132, 217, 218, 481, 523, 525, 562 ; 
Vol. III., 181, 363, 364, 428, etc. 



102 WEALTH AND PROGRESS. 

His investigations were not confined to a single 
locality, but they cover the greater part of Southern 
India. They were taken from places so distinct that 
different modes of payment prevailed, and even differ- 
ent kinds of money were used. Notwithstanding all 
this social isolation and industrial difference, real 
wages are everywhere clearly governed by the same 
law ; for whether we find the laborer receiving his 
wages in food, cloth, house rent and money, or in 
grain, without house rent, cloth, or money, or all in 
money, makes little or no real difference. In all cases 
the laborer's income, of whatever it consists, is, gen- 
erally speaking, in close conformity to the cost or 
standard of living, and that is the only thing to which 
wages appear to sustain any uniform consistency. 

What Buchanan found in the last quarter of the eigh- 
teenth century, the elder Mr. Brassey found in the 
middle of the nineteenth. 

Speaking of the laborers of India employed by his 
father in building railroads in that country, Sir 
Thomas Brassey says : * " Their food consists of two 
pounds of rice a day, mixed with a little curry, and the 
cost of living on this, their usual diet, is only a shil- 
ling (twenty-four cents) a week. " " In India, wages," 
says the same writer, " ranged from fourpence to 
fourpence-half-penny (nine to ten cents) a day," which 
are substantially the same as those given by Buchanan. 

If we turn from India to China we find a similar state 
of things. While it is difficult to get reliable data as 
to the industrial system of China, the little we have 
confirms the view we have taken. The testimony of 
travellers, inconsistent in many other respects, all goes 

* " Work and Wages," p. 88, ninth edition. 



MODE OF LIVING IN INDIA AND CHINA. 103 

to show that the wants of the laboring classes in China 
are very few — that their diet consists mainly of rice 
and a few vegetables — that their costumes are of the 
simplest and cheapest kind. They huddle together, 
large numbers crowding into small apartments,* almost 
without furniture — if tin cans, chop-sticks, and board 
bunks and benches admit of such a designation — and, 
consequently, the cost of their living is but a few 
cents a day. All this is fully confirmed by what we 
see of the habits and modes of living of Chinese labor- 
ers who have emigrated to other countries, especially 
to Australia and this country — -notably in California — 
where they have settled in sufficiently large numbers 
to carry with them their national habits. 

While parents do not sell their children in open 
market for slaves in China, as in India, they frequently 
destroy them because of their inability to give them 
a living. " Marriage is encouraged in China," says 
Adam Smith, " not by the profitableness of chil- 
dren, but by the liberty of destroying them. In all 
great towns several (children) are every night exposed 
in the streets, or drowned like puppies in the water. 
The performance of this horrid office is even said to 
be the avowed business by which some people earn 
their subsistence." f 

True, the political and social institutions of China 
are in many respects essentially different, and, perhaps, 



* " Their wants are few and they are easily satisfied. The poorer 
classes live almost entirely on rice and vegetables, to which they 
sometimes add small pieces of fish or meat. Their clothes are of the 
cheapest kind, and they are so accustomed to crowded apartments that 
house rent forms an insignificant item in a Chinaman's expenditures." 
— " Encyclopedia Britannica," Vol. V., p. 671. 

f " Wealth of Nations," Book I., ch. 8, pp. 55, 56. 



104 WEALTH AND PROGRESS. 

superior, to those of India. In China education is 
general, if not universal ; " it being intended," says 
Draper,* " that every Chinese shall know how to read 
and write ;" and, public officers being selected by "com- 
petitive examination, the way to public advancement 
is (theoretically, at least) open to all ;" while in India 
the laborer not only receives little or no education, 
but is forbidden even to associate with those who do. 
He is also excluded, by the combined force of caste, 
custom, and law, from the possibility of social distinc- 
tion or political power. f But, notwithstanding the 
constitutional difference between the political and 
social institutions of the two countries, there is one 
thing in which the sudra of India and the laborer in 
China are very similar — that is, in their mode and 
their cost of living. In both countries the main 
diet of the laborers is rice, or some other equally 
cheap vegetable, with a little seasoning ; in both 
countries house rent is a mere fractional item, and 
furniture almost out of the question. In both coun- 
tries clothing is of the simplest and cheapest kind ; but 
in China, if it is not dearer, a rather larger quantity is 
used. 

Thus, with the exception of clothing, the cost of 
living in the two countries is very much the same. 
Therefore, if the doctrine that the cost of living is the 
law of wages be true, for the same reason that wages 
are low in India may we expect to find them nearly as 
low in China, and, so far as reliable data is obtainable, 
this is precisely what we do find. Accordingly, while 
wages vary from five to eight cents a day in India, 
they are from six to ten cents a day in China. 

* " Intellectual Development of Europe," p 618. 
\ Buckle's " History of Civilization," pp. 56, 57. 



STYLE OF LIVING IN ASIA AND ENGLAND. 105 

If we leave Asia and go to Europe — if we turn our 
attention from the industrial systems of India and 
China to that of England* — though the seeming is 
different, the fact is the same. While in other re- 
spects the conditions of society in England are entirely 
different from those of India and China, we find the 
same principle obtains in relation to wages. Although 
at the time the laboring classes in England began to 
emerge from the system of slavery (or serfdom) to that 
of wages, the political, social, and religious institutions 
under which they lived were entirely different from 
those existing in Asiatic countries, there was still one 
feature common to them all, viz., their material con- 
dition. 

In England, as in India and China, the laborer's 
mode of life was simple, his wants were few, and his 
living was cheap. What rice was to the Hindoo and 
Chinese laborers, wheat was to the English. f While 
in the former countries the laborer's diet mainly con- 
sisted of rice or ragi, with a little fish and seasoning, 
in the latter it consisted, for the most part, of bread, 
herring, and beer.+ Nor can the habitation of the 

* We take England because it is there that the wages system has 
been in existence the longest and has become the most general, and 
also because reliable industrial data is more abundant in that country 
than in any other. As Rogers observes, " the archives of English his- 
tory are more copious and more continuous than those of any other 
people. . . . The information from which the economical history of 
England and the facts of its material progress can be derived, become 
plentiful and remain continuously numerous from about the last ten 
or twelve years of the reign of Henry III.," or about the middle of 
the thirteenth century. 

f There are, however, certain other facts, which prove the same 
position, that the Englishman of the Middle Ages subsisted on wheaten 
bread and barley beer." — Rogers's " Work and Wages," p. 60. 

\ " At this period (the thirteenth century) the food of laborers con- 



106 WEALTH AND PROGRESS. 

English laborer be said to be any better than that of 
his Asiatic brother. We find him in the thirteenth 
century existing — for living it can hardly be called — in 
a hut that would barely keep out the snow and rain, 
which had neither windows nor chimneys, with the 
bare ground for the floor, rushes for a bed, and, some 
writers say, " a block of wood for a pillow." * And, 
with the exception of an iron pot for cooking, and 
earthen vessels, their furniture, which was of the 
roughest kind, was home-made, all of which, accord- 
ing to the inventories made in the taxing rolls of Ed- 
ward I., were valued at a few shillings. f 

Consequently, we find his wages correspondingly low. 
According to some writers, wages in England, in the 
thirteenth century, were only " a penny a day in har- 

sisted principally of fish, chiefly herrings, and a small quantity of 

bread and beer." — Wade's "History of the Middle and Working 

Classes,' 1 p. 8. 
* " In the houses of these villages (in the thirteenth century) the 

floor was the bare earth. . . . The wood fire was on a hub of clay. 

Chimneys were unknown, except in castles and manor houses, and 

the smoke escaped through the door or whatever aperture it could 

reach. The house of the peasant cottager was ruder still." — Rogers's 

" Six Centuries of Work and Wages," pp. 67, 68. 

Wade describes them as even worse. See " History of the Middle 

and Working Classes," pp. 8, 9, 12. 

f The following is a copy of an inventory of household furniture of 

a peasant taken in 1301, six years before the death of Edwar I. : 

A maize cup £0 os. 6d. 

Abed 01 6 

A tripod 00 3 

A brass pot 01 o 

A " cup 00 6 

An andiron 00 3}- 

A brass dish , 00 6 

A gridiron 00 6 

A rug or coverlet 00 S 

£0 5-r. Bid. 
— Eden's " State of the Poor, ' Vol. I., p. 22. 



WAGES IN ENGLAND NINE CENTS A DA V. 107 

vest and a half-penny at other seasons." * This is so 
very small that one is tempted to regard it as excep- 
tional, although Hallam f finds " a bailiff's account of 
expenses" more than a century later, in 1387, " where 
it appears that a ploughman had sixpence (twelve cents) 
a week, and five shillings (one dollar and twenty cents) 
a year, with an allowance of diet, which seems to have 
been only pottage." Thorold Rogers says :$ "His 
wants were few, and most of them were satisfied on 
the spot. . . . The bailiff hired hands by the year, 
but these were constantly paid in allowances of grain 
and a small sum of money. Where one does find 
day work paid for, it is at about the rate of twopence 
(four cents) a day for men, one penny (two cents) for 
women, half-penny (one cent) for boys." 

But, as " agricultural laborers were rarely paid by 
the day," this price was only paid occasionally, and 
was evidently exceptionally high, for, when speaking 
of the wages of those who had constant employment 
throughout the year, he says : " When the hinds were 
hired by the year they received a quarter of corn at, say, 
four shillings every eight weeks, and six shillings, 
money wages, i.e., about the value of thirty-two shil- 
lings a year. They were always, however, boarded in 
harvest time and at periods of exceptional employ- 
ment. This board, as I find from other sources, was 
reputed to cost from one and a quarter to one and a half- 
pence (two and a half to three cents) a day, and if 
we take six weeks as the time thus employed, the real 
wages which they received would be in the aggregate 

* Wade's " History of the Middle and Working Classes," p. 8. 

f " History of the Middle Ages," Vol. II., ch. 9 ; Part II., p. 310. 

% " Work and Wages," pp. 169, 170. 



108 WEALTH AND PROGRESS. 

about thirty-five shillings and eightpence a year," 
equal to seventeen cents a week, or about three cents 
a day. If we allow for the difference in the value of 
money, a penny then representing about as much silver 
as threepence does now, wages would be about from 
six to nine cents a day. Thus we see that the cost of 
living and also the wages of the English laborer in the 
thirteenth century were substantially the same as 
those of the laborer in India and China. 

Since the close of the thirteenth century, however, 
a great difference has arisen between the material as 
well as the political and social condition of the work- 
ing classes in England and that of those in Asia. In 
China, and for the most part in India, the wants (stand- 
ard of living) of the laboring classes are practically 
unchanged, while in England they have undergone a 
most wonderful development. The laborer in China 
and the sudra of India still live mainly upon rice, 
while the diet of the English laborer to-day includes 
not only every variety of home production, but also 
many of the delicate luxuries produced in almost every 
country on the earth. While the Chinaman still hud- 
dles in a hole,* eats with chop-sticks, and sleeps on a 
board, and the sudra inhabits a hut without furniture, 
the English laborer lives in a house well built and bet- 
ter furnished than were those of the nobility in the 
thirteenth century. \ 

Accordingly, if the principle we have laid down is 
correct, this radical difference in the wants and, conse- 
quently, in the cost of living, between the English and 
Asiatic laborer will be accompanied by a proportion- 

* An apartment six feet by five can hardly be called anything else, 
f Henry II. slept on a bed of rushes. 



WAGES IN ENGLAND AND ASIA TO-DAY. 109 

ate difference in their wages. And so it is. Indeed, 
this is the only circumstance which fully explains the 
reason why we find the laborer in Asia to-day work- 
ing for about the same wages he received six centuries 
ago, while those of the British workman have risen 
over a thousand per cent. And if we trace the prog- 
ress of the English laborer from the thirteenth century 
to the present time we shall find that every movement 
in his wages from that day to this has been in ac~ 
cordance with the same law. 



CHAPTER IV. 

THE RISE OF REAL WAGES IN ENGLAND IN THE 
FOURTEENTH CENTURY. 

SECTION I. — Why Real Wages Rose After the Famine 
in 13 1 5-21. 

BECAUSE prices sometimes rise without an immedi- 
ate proportionate rise in wages taking place, Adam 
Smith, and most of the able economists who have 
followed him — including Thorold Rogers — have con- 
cluded that wages are not controlled by the cost of liv- 
ing, but by supply and demand. It is no valid objection 
to our theory to find a marked difference between 
wages and the cost of living at any given time. On 
the contrary, such disparities are, for reasons already 
explained,* in perfect harmony with this theory, and 
what we may always expect to find wherever prices are 
subject to sudden changes. One of the earliest illus- 
trations of the operation of this law is shown in the 
first distinctive rise of wages that took place in Eng- 
land. It was at the time of the great famine in the 
first quarter of the fourteenth century (1315-21). 
Through the failure of the crops the cost of raising a 
bushel of wheat was greatly increased. Now, wages 
did not rise simultaneously with the rise in the price 
of provisions — they never do — but they immediately be- 
gan to move in that direction. Had the failure of the 



* Chapter II., Sec. V., Pjrt II. 



INFERRING FACTS TO SAVE A THEORY. in 

crops in 1315 been followed by a good harvest in 13 16 
wages might have risen but slightly, as in that case 
the prices would have returned to the wages. But the 
scarcity continued more or less severe for seven years, 
during which time wages increased thirty per cent.* 

Thorold Rogers, who is forced to recognize the fact 
that a great rise of wages did follow this increase in 
the cost of living, is manifestly either very loath to ad- 
mit, or unable to see, that they rose on that account, 
and he makes a strenuous endeavor to explain it on 
the theory of supply and demand. In doing this he 
affords a striking illustration of the length to which 
great men may sometimes be led in creating facts to 
sustain a theory, instead of making their theory wholly 
depend upon its ability to explain the facts. Upon 
the hypothesis that wages can rise only when laborers 
are scarce, f and finding that wages did rise, he con- 
cludes that there must have been a falling off in the 
supply of laborers ; hence, in order to explain this in- 
crease in wages, he assumes that the people must have 
died from famine, and says \% " That the famines of this 
unfortunate period led to a considerable loss of life is 
proved by the unquestionable rise in the rate of agri- 
cultural wages after their occurrence." This conclu- 
sion is philosophically unsound, and, to say the least, 

* " The immediate rise in the wages of labor after the famine of 
Edward II. 's reign is as much as from twenty-three to thirty per 
cent, and a considerable amount of this becomes a permanent charge 
on the costs of agriculture." — Rogers's " Work and Wages" p. 218. 

f " Now it is generally the case that, unless the laborer is paid at a 
rate which leaves him no margin over his necessary subsistence, an in- 
crease in the price of his food is not followed by an increase in ths 
rate of wages, this result being arrived at only when there is a scar- 
city of hands." — " Work and Wages," p. 217. 

X Ibid., p. 217. 



112 WEALTH AND PROGRESS. 

historically doubtful. If it were true, as assumed by 
Mr. Rogers and others, that wages never rise except 
when the demand for labor is in excess of the supply, 
there could have been no increase of wages in England 
from the last quarter of the fourteenth century to the 
present time. There has not been a time in the his- 
tory of England, from the Black Death to this hour, 
when the number of laborers in that country has not 
been in excess of the demand. 

Still, wages have continued to rise, and are to-day 
many hundred per cent higher than they were in the 
fourteenth century, when labor was the scarcest it was 
ever known to be. Therefore, the fact that wages rose 
does not of itself justify the assumption that the popu- 
lation had decreased or that the supply of laborers was 
inadequate to the demand. Nor is it at all clear that 
any such increased mortality occurred as to warrant 
such a conclusion. There can be little doubt but that 
the famine inflicted terrible hardships upon the poor, 
and that many died of starvation, but the evidence ap- 
pears to be entirely wanting of any such terrible death- 
rate as would cause a sufficiently marked scarcity of 
labor to account for an increase of thirty per cent in 
wages. Although the historical data of that period is 
very meagre, a circumstance which struck down the 
population by starvation would hardly have escaped 
the notice of the best writers, such as Hallam, Eden, 
and others, and especially as it occurred only about 
thirty years before the Black Death Plague, which 
struck terror into all Europe. Indeed, Mr. Rogers 
obviously draws his conclusions as to the increased 
death-rate more from inference than from fact, and, 
instead of connecting the rise of wages with the histor- 
ical fact of the falling off of the population, he infers 



THOROLD ROGERS'S DILEMMA. 113 

the increased mortality from the fact that wages rose, 
and says :* " Considerable loss of life is proved by the 
unquestionable rise in the rate of agricultural wages." 
The rise of wages does not prove any such thing. 
Again, this inference is greatly weakened by another 
circumstance which he relates on the same page. " It 
is said by chroniclers," he adds, " that in the universal 
scarcity numbers of servants and domestics were dis- 
charged ; that, made desperate, these people became 
banditti ; and that the country folk were constrained 
to associate themselves in arms in order to check 
the depredations of those starving outlaws." Now, 
if this be true — and there can be little doubt about it, 
both because of the frequency with which it is referred 
to by other writers, and that it is just what would 
naturally occur under such circumstances— it greatly 
impairs the value of the conclusion above, that the rise 
of wages was the result of the increased mortality 
among the laboring classes. Indeed, the two cir- 
cumstances are incompatible with each other. If 
it were true that, through the increased death-rate, la- 
borers had become so scarce that thirty per cent higher 
wages had to be offered in order to obtain them, it is 
impossible that discharged laborers should have be- 
come " starving outlaws," and desperate, roving 
" banditti," for want of employment. 

But, when we view the rise of wages as resulting 
from the increased cost of living instead of from the 
scarcity of labor, the whole phenomena at once be- 
comes explainable and appears perfectly natural, and 
the increased idleness and increased wages become 
quite compatible with each other. The rise in the 

* " Work and Wages," p. 217. 



114 WEALTH AND PROGRESS. 

price of provisions that would naturally accompany 
such a general failure of crops must have been such as 
to make an increase of wages for those who work in- 
evitable, although the unemployed should be doubled 
or trebled. It is obvious that, however many laborers 
were out of work, it was impossible for those who did 
work to do so for less than would give them a living ; 
and we may be quite sure that, under such circum- 
stances, even the increased rate of wages would not 
more than barely do that. Nor is it less certain that 
the numbers of the unemployed would be increased. 
With both provisions and wages at famine prices it is 
very natural that the number of laborers and domestics 
would be reduced to the minimum, and, in many in- 
stances, would be dispensed with altogether. Thus, 
it is not only possible, but it is perfectly natural that, 
in a state of protracted scarcity, money wages should 
rise and the number of tramps increase at the same 
time, which was the case in the reign of Edward II. , 
and has been many times the case since, a set of circum- 
stances entirely unexplainable upon any other theory 
of wages. 

This seven years of scarcity, however, was followed 
by a quarter of a century of uninterrupted plenty. 
We are told — and on this point authorities generally 
agree — that during the last five years of the reign of 
Edward II., and the first twenty of that of Edward 
III., the harvests were very good, crops of all kinds 
being abundant. This is manifest also from the fact 
that the price of wheat, the average of which, in 13 16, 
was sixteen shillings a quarter, some being sold as high 
as twenty-six shillings and eightpence,* fell to " five 

* Rogers's " Six Centuries of Work and Wages," ch. 8, p. 215. 



WHY WAGES DID NOT FALL WITH PRICES. 115 

shillings and fourpence, the average of the first twenty- 
five years of the reign of Edward III." * 

The most remarkable feature of this extraordinary 
period, however, is the fact that, although wages rose 
with the rise in the price of provisions during the fam- 
ine, they did not fall with the fall in prices after the 
famine. And, it may be added, they never have 
fallen to the same point since. This, at first sight, 
may have a paradoxical seeming, and suggest the 
query that, if the cost of living is the law of wages and 
a rise of prices causes a rise of wages, how comes it 
that a fall in prices does not also cause a fall in wages ? 
On a moment's reflection, however, the reason for this 
becomes apparent. 

It will be remembered that there are nominal wages 
and real wages. The former are governed by the cost 
of living and move in the direction of the price of 
commodities. The latter are governed by the standard 
of living and move in the direction of the wants, or 
quantity of wealth consumed. Hence, whether or not 
nominal or money wages will fall as well as rise with 
the rise of prices, will depend entirely upon whether the 
causes that affect both nominal and real wages, or 
only those that affect nominal wages, have been oper- 
ating. If, for instance, the standard of living is un- 

* Tooke's " History of Prices," Vol. I., ch. 3, p. 21. Speaking of 
the same period, Rogers says : " The period which intervened between 
the last of three bad harvests (1321) and the great event to which I shall 
next advert (the Black Death, 1349) was one of exceptional prosperity. 
The harvests were generally abundant, the wages of labor had been 
permanently improved, and all kinds of produce were cheap." — "Six 
Centuries of Work and Wages," p. 2ig. 

See also table of prices in " Wealth of Nations," Book I., ch. 11, 
and Hallam's " History of the Middle Ages," Vol. II., ch. 9, Part II., 
p. 268. 



n6 WEALTH AND PROGRESS. 

changed, then for the same reason that money wages 
will tend to rise with the rise of prices, will they tend 
to fall with the fall of prices ; but if the causes 
which affect the standard of living have also operated, 
the result may be very different. If the prices rise 
and wants increase at the same time, although money 
wages will rise with the rise in prices, they will not 
necessarily fall with them. For in that case when the 
fall in prices occurs, instead of nominal wages falling 
in the same ratio, the surplus is absorbed in supplying 
the new wants, thereby constituting a bond fide rise of 
real wages. 

Now, this is just what took place at the period of 
which we are writing and explains why wages did not 
fall with the fall of prices after the famine of 131 5-21. 
The rise of money wages at that time was unques- 
tionably due to the exceedingly high prices, but the 
increase in real wages which became visible when the 
price of labor failed to fall with the price of provisions 
was due to an entirely different cause, as the move- 
ment of real wages always is. This was not the result 
of any circumstance immediately connected with the 
famine, the effects of which upon wages disappeared 
with the return of plenty. 

The rise of real wages was the result of social causes 
which had been in operation for fully a century before 
that time. During the last quarter of the twelfth and 
the whole of the thirteenth centuries, through causes 
which I cannot now stop to describe, the free towns 
and cities made great progress." These free cities, 

* The rise and development of the free cities and towns, and their 
relation to the progress of industrial prosperity and the growth of 
social and political freedom among the masses, will be found in the 
opening chapters of the next volume of this work, where it will be 



SOCIAL POWER OF THE FREE CITIES. 117 

which were the outcome of the baronial towns of the 
tenth and eleventh centuries, by the thirteenth century 
had become the centres of trade and industry.* In 
their struggles to protect themselves against the plun- 
dering of the barons on the one hand and the exactions 
of the king on the other, the towns were compelled to 
resort to all the means of strengthening themselves 
within their reach. Consequently, in the struggle be- 
tween the feudal lords and the monarchy for supremacy, 
which lasted several centuries, the towns or cities would 
side with the barons and help them to resist the exac- 
tions of the king, if they would increase their town priv- 
ileges. And, on the other hand, they would fight for 
the king if he would grant them greater charter priv- 
ileges, exempting them from the authority of the 
barons, whose property they originally were. This he 
was naturally willing to do, because by that means he 
weakened the power of the barons, who were his stand- 
ing enemies. By this and kindred means the towns 
gradually acquired commercial privileges, and finally 
the right of self-government. f 

shown that the free cities were really the birthplace and nursery of 
modern civilization. 

* " From the middle of the twelfth century to that of the thirteenth, 
the traders of England became more and more prosperous. The 
towns on the southern coast exported tin and other metals in ex- 
change for the wines of France ; those on the eastern sent corn to Nor- 
way ; the Cinque-ports bartered wool against the stuffs of Flanders." 
— Hallani 's " History of the Middle Ages," Vol. II., p. 80. 

f " Under such a system of arbitrary taxation, however, it was evi- 
dent to the most selfish tyrant that the wealth of his burgesses was his 
wealth, and their prosperity his interest ; much more were liberal and 
sagacious monarchs, like Henry II., inclined to encourage them by 
privileges. From the time of William Rufus (1087 to 1100), there was 
no reign in which charters were not granted to different towns, of ex- 
emption from tolls on rivers and at markets — those lighter manacles of 



n8 WEALTH AND PROGRESS. 

It was in this way the great Magna Chart a, which 
declared all existing charters of the towns, and especially 
that of the city of London, inviolable, was wrung from 
the treacherous and cowardly King John on that mem- 
orable 15th of June, 121 5. By these charters the 
towns, as just remarked, finally acquired the right of 
self-government, frequently to the extent of electing 
their own magistrates, levying taxes, supporting their 
own military, etc.* 

In order to increase their numbers, wealth and 
strength, both for defensive and offensive purposes, 
against either the barons or the king, the cities offered 
an asylum to all who should escape thither, and, after 
one year's residence within the walls of the city, even 
serfs were declared free, and were granted all the rights 
and privileges of citizenship, f which was not only to 
participate in defending, but also in governing, the city. 

The necessary result of this was, not only that serfs 
began to flee to the towns and cities for freedom, 
" but," as Guizot says,^; " frequently men of consid- 
erable rank and wealth . . . upon being attacked by 
more powerful neighbors or by the king himself," 

feudal tyranny ; or of commercial franchises ; or of immunity from the 
ordinary jurisdictions ; or, lastly, of internal self-regulation." — Hal- 
lam's " History of the Middle Ages," Vol. II., p. 78. 

* See Guizot's " History of Civilization," p. 153. 

f " In order to swell their numbers," says Hallam, " it became the 
practice to admit all who came to reside within their walls to the 
rights of burghership, even though they were villeins — appurtenants to 
the soil of a master, from whom they had escaped." And he adds in 
a note : " One of the most remarkable privileges of chartered towns 
was that of conferring freedom on runaway serfs." — •" History of the 
Middle Ages," Vol. I., p. 170. 

See also Guizot's " History of Civilization," pp. 153-157- Wade's 
" History of the English Working Classes," p. 9. 

\ " History of Civilization," p. 157, 



CHANGE IN THE LABORER'S CONDITION. 119 

v/ould " carry away all the property they could rake 
together and enter the city" for safety and protection. 
By these means the population, wealth, power, and 
social character of the towns rapidly increased, so that 
early in the third quarter of the thirteenth century 
(1264) they began to be represented in Parliament.* 

The natural result of these changed social conditions 
was that the power of the feudal lords gave way to 
that of the commoners, the serfs and villeins became 
hired laborers,! and by the end of the thirteenth cen- 
tury feudalism was virtually overthrown and the period 
of free labor was inaugurated. 

It will thus be seen that during the hundred years 
immediately preceding the time of which we are writ- 
ing — from the granting of the Magna CJiarta in 121 5 
to the famine in 13 15 — circumstances occurred that 
radically changed the social and economic condition of 
the laborers. During this period they had ceased to 
be mere serfs of the soil, inseparable from the lord's 
estate, without rights except by his decree. They had 
become hired laborers, with the legal right, at least, 
to go whithersoever their labor was in demand, or 
tenants paying rent for the land either in money or its 
equivalent in service. All this change in the industrial 
conditions, the greater social contact consequent upon 
the increasing variety of social duties and industrial 
calling, arising from the growing prosperity and social 
complexity of the free cities,;}; in the government of 

* Hallam's " History of the Middle Ages," Vol. II., p. 83. See 
also Guizot's " History of Civilization," p. 172. 

f Hallam's " History of the Middle Ages," Vol. II., p. 204. 

X For evidence of the prosperity of the free towns see Rogers's " Six 
Centuries of Work and Wages," pp. 115-117 ; Hallam's " History of 
the Middle Ages," Vol. II., pp. 76-80, 266-268, 271, 272 ; Wade's 



120 WEALTH AND PROGRESS. 

which they also took part, naturally produced consid- 
erable change in the social needs, desires, and aspira- 
tions — wants and character — of the people, as the 
history of that period abundantly shows. Indeed, it 
was impossible that this should be otherwise. Con- 
sequently, when prices fell after the famine (132 1), all 
the conditions were ready for transforming the rise of 
nominal wages which had occurred during the famine 
into a permanent rise of real wages. There is nothing 
surprising, therefore, in the fact that wages did not 
fall again with the fall of prices, but, on the contrary, 
that the greater part of the rise in nominal wages should 
be converted into a rise of real wages was the natural 
effect of the changed condition of the masses, arising 
from the general economic movement of the period, 
and would, from the nature of things, have taken 
place if the famine had never occurred. It might, and 
probably would, have been less sudden and noticeable 
at that particular time, but it would have been no less 
sure. If we trace the history of labor from that time 
to this we shall find that wages have always moved in 
accordance with the same law, and real wages have 
everywhere risen or remained stationary according to 
the advancing or stationary condition of the laborer's 
social character and standard of living. But what ap- 
pears to me the most remarkable of all is that this fact 
should be so generally observed by economists,* and 



" History of the English Working Classes," pp. 9-11 ; Guizot's 
" History of Civilization," ch. 7. 

* See Smith's " Wealth of Nations," Book V., ch. 2, p. 691 ; Tor- 
ren's " Essay on the External Corn Trade," pp. 57, 58 ; Ricardo's 
" Principles of Political Economy and Taxation," pp. 50, 52, 75, 93 ; 
M. Say's " Treatise on Political Economy," pp. 336, 337 ; McCulloch's 
"Principles of Political Economy," Part III., sec. 7, pp. 177, 178, 



THE PLAGUE AND THE RISE OF WAGES. 12 I 

yet its economic relation to wages be almost entirely 
overlooked. 



Section IL— The Black Death not the Real Cause 
of the Rise of Wages in 1350-51. 

The next important epoch in the history of wages 
occurred about the middle of the fourteenth century. 
About that time (1349) a fearful pestilence, known as 
the Black Death, which is said to have arisen in China 
several years before, after working havoc in most of the 
countries of Europe, reached England,* when about 
one third of the population died in a few months. In 
1350 there was a marked rise in the rate of wages, and 
the rise not only became permanent, but it continued 
its upward tendency until well into the second quar- 
ter of the next century. Here, again, our economic 
historian, Thorold Rogers, endeavors to put the stamp 
of English political economy upon industrial history. 
Upon the erroneous theory that wages only rise when 
labor is scarce, for the same reason that he assumed 
exceptional mortality among the laborers to account 
for the rise of wages in 1322, he attributes the rise of 
wages in 1350 and 1 35 1 , and the prosperous condition 
of the masses during; the last half of the fourteenth 



181, 182, 184 ; Brassey's " Work and Wages," pp. 15, 16, 59-61, 
70, 88, 89, 93-96, 105, 108. 

* " The disease began in the Levant about 1346, from whence Ital- 
ian travellers brought it to Sicily, Pisa, and Genoa. In 1348 it passed 
the Alps and spread over France and Spain ; in the next year it reached 
Britain, and in 1350 laid waste Germany and other northern states, 
lasting generally about five months in each country. At Florence, 
more than three out of five died." — Hallam s " History of the Middle 
Ages" Vol. I., p. 44. 

7 



122 WEALTH AND PROGRESS. 

and the first half of the fifteenth century to the scar- 
city of labor by the Black Death in 1349. A little ex- 
amination of the industrial phenomena of the period, 
however, shows that this circumstance is inadequate 
to account for the industrial events that followed. The 
pestilence in 1349, like the famine in 13 15, was the cir- 
cumstance which unquestionably made it possible for 
the rise in wages to be more sudden than it otherwise 
would have been, but neither event of itself could 
ever cause a permanent rise in real wages. The only 
way such events can affect wages is through their in- 
fluence upon prices, which, as before explained, ceteris 
paribus, affect nominal but never real wages. In- 
deed, if famine, pestilence, and their sister evil, war, 
were the promoters of real wages, then the laboring 
classes in Europe, from the ninth to the nineteenth 
century, would surely have been in the most opulent 
circumstances, for they were seldom free from one or 
other, and often all, of these wealth and life-destroy- 
ing agents. Such an idea could only be born of the 
rankest economic heresy. 

That the increase in real wages which commenced in 
1350-51 was the result of the same general causes as 
that in 1322, and must have taken place if the plague 
had never appeared, is shown by all the industrial data 
of the period. Now, if the rise of wages in 1350 was, 
as Mr. Rogers says,* " the actual effect of this great 
and sudden scarcity of labor," they would have fallen 
again to their former level when the scarcity of labor 
ceased, which, he admits, was very soon.f But, in- 



* " Six Centuries of Work and Wages in England," p. 227. 
f " I make no doubt that the population speedily righted itself, as 
it has done on many other occasions, when a sudden or abnormal 



THE "SCARCITY OF LABOR" THEORY FAILS. 123 

stead of that they continued to rise for half a century 
after the scarcity disappeared, and, despite the subse- 
quent and almost continuous redundance of labor, 
they have never fallen to the same point since. 

Again, if this scarcity of labor was the real cause of 
the rise of wages, why was not the effect somewhat 
proportionate to the cause ? With such a sudden 
diminution in the population, taking his own estimate 
of one third, there could be nothing, at least so far as 
the supply of laborers was concerned, to prevent 
them from fixing their own price upon their labor, 
limited only by the ability of the employer to pay. 
Indeed, he tells us * that such was the scarcity of labor 
'■' that crops were often suffered to rot in the fields for 
want of hands," and " that cattle and sheep roamed 
at large over the country for lack of herdsmen." 

Now, why, under these circumstances, did not wages 
rise to a shilling or even to two or three shillings a 
day ? Why did the laborers only aspire to fivepence 
(ten cents) a day when, according to the supply and 
demand theory, they could have had many times as 
much ? Why wages could not be kept at threepence 
a day seems clear to Mr. Rogers, but why they should 
not rise above fivepence a day his " scarcity of labor" 
doctrine is wholly unable to explain. Considered in 
the light of the theory we have presented, however, 
this whole phenomena at once becomes, not merely 
explainable, but perfectly natural. Viewed from the 
doctrine that the standard of living, instead of the 
abundance or scarcity of labor, is the determining in- 

destruction of human life has occurred in a people and the people has a 
recuperative power. That they had this power is proved by the events 
which followed." — " Work and IVages," p. 226. 

* " Work and Wages," p. 227. American edition. 



124 WEALTH AND PROGRESS. 

fluence in wages, the reason why wages did not rise 
above fivepence a day at once becomes as clear as that 
of the inability of the authorities to keep them at 
threepence. It was simply because fivepence a day 
was sufficient to defray their cost of living. A perma- 
nent rise in the rate of real wages never occurs except 
from a rise in the laborer's social character and stand- 
ard of living ; and hence is always proportionate 
thereto. And this the pestilence, like the famine, in 
the very nature of things, could not produce. 

A brief glance at the events of that period will suffice 
to show that the increase of from two to four cents a 
day in wages after 1350 was the natural result of the 
same general influences which led to the rise of from 
two to three cents a day in real wages after 1320-22. 
It was simply a part of the same social and industrial 
movement already referred to, which had its rise in 
the free towns in the twelfth, and continued to gain 
momentum till the last quarter of the fourteenth cen- 
tury. The circumstances which contributed so largely 
to the growth and prosperity of the free towns during 
the thirteenth century began to operate with greater 
force after the first quarter of the fourteenth. 

Rogers tells us that the period between the famine 
and the plague (1322-50) " was one of exceptional 
prosperity. The harvests were generally abundant, 
the wages of labor had been permanently improved, 
and all kinds of produce was cheap. The early days 
of the war did not impair the general well-being of the 
English people." * It was during this period (1331) 
that Edward III., whom Hallam calls " the father 
of English commerce," invited the Flemish manu- 

* " Work and Wages," p. 219. 



THE INCREASE IN THE LABORER'S WANTS. 125 

facturers to settle in England,* in order to promote 
the manufacture of fine woollen, for which England 
has ever since been so famous. 

The Hanseatic Confederacy had now become well es- 
tablished, and the English towns were fast acquiring a 
prosperous foreign trade. " This opening of the 
northern market," says the same author, "power- 
fully accelerated the growth of our own commercial 
opulence, especially after the woollen manufacture 
had begun to thrive. From about the middle of the 
fourteenth century, we find continual evidence of a 
rapid increase of wealth." f In brief, this was really 
the dawn of a new industrial system, which created 
new wants among the laboring classes, and conse- 
quently increased the cost by raising the standard of 
living. Not that things were dearer, but a greater 
quantity of them was needed. The demand for more 
home comforts was becoming general. The hovels 
contentedly occupied by the laborer of the thirteenth 
century now failed to give satisfaction. This is shown 
by the fact that houses with chimneys,;}: which were 

* The following remarkable inducements offered by Edward III. 
to the Flemish manufacturers to settle in England are quoted by 
Blomefieldin the history of Norfolk, from Fuller's" Church History": 
" Here they should feed on fat beef and mutton till nothing but their 
fulness should stint their stomachs. Their beds should be good, and 
their bedfellows better, seeing the richest yeomen in England would 
not disdain to marry their daughters unto them, and such the 
English beauties that the most envious foreigners could not but com- 
mend them." — See Hallim's "History of the Middle Ages," 'Vol. II., 
p. 268. 

f Hallam's " History of the Middle Ages," Vol. II., pp. 271, 272. 

% " The two most essential improvements in architecture during 
this period, which had been missed by the sagacity of Greece and 
Rome, were chimneys and glass windows. Nothing apparently can 
be more simple than the former, yet the wisdom of ancient times was 



126 WEALTH AND PROGRESS. 

previously only known to the rich, now began to be 
demanded by the laborer, which was soon followed by 
the additional comfort of windows, first of lattice, then 
of horn, and by the end of the century we are told 
glass was used.* This would very naturally stimulate 
the desire for something in the way of furniture — not 
upholstery, indeed, but something better than mere 
blocks of wood hewn into shape with a broad-axe and 
spokeshave, as was the case prior to the fourteenth 
century, f 

This increase in the daily wants, and, therefore, the 
cost of living, of the masses, being the result of natural 
causes which had been in operation for more than a 
century previous,;}: not only prepared the way for a 

content to let the smoke escape by an aperture in the centre of the 
roof. . . . About the middle of the fourteenth century, the use of 
chimneys is distinctly mentioned in England and Italy, but they were 
found in several of our castles which bear a much earlier date." — 
Hollands " History of the Middle Ages,'" Vol. II., p. 293. 

* Hallam's " History of the Middle Ages," Vol. II., pp. 293, 294. 
f Some idea ot the quality of the household furniture of the laborer 
before this time may be gathered from the fact that a full set of car- 
penters' tools, according to the inventories made in the reign of 
Edward I. (1301), consisted of 

A broad-axe value 5</. 

Another axe " 3 

An adze " 2 

A square " 1 

A marger, or spokeshave. . . " 1 

Total value is. 

For a full statement of this period the reader is referred to Eden's 
" State of the Poor," Vol. III. 

\ " A silent alteration had been wrought in the condition and char- 
acter of the lower classes during the reign of Edward III. This was 
the effect of increased knowledge and refinement, which had been 
making a considerable progress for full half a century, though they 
did not readily permeate the cold region of poverty and ignorance." 
— Hallam's "History of the Middle Ages" Vol. II., p. 204. 



THE RISE OF WAGES NOT ABNORMAL. 127 

rise of wages, but had made that event inevitable. 
Consequently, when the pestilence came and struck 
down ' ' one third of the population, ' ' the rise of wages, 
which we have seen had already commenced, and 
would otherwise have been gradual, now took place 
suddenly. 

But, although the rise in wages was somewhat sud- 
den, it was not abnormal. Being governed by the cost 
of living, wages very naturally rose only as that had 
been increased. Unlike the rise of 132 1, there was 
now no increase in prices, the harvests having for many 
years previous been very good. Therefore, the in- 
crease in the cost of living in this instance was mainly 
due to the higher standard of living, caused by the 
new wants which had been developed by the influences 
to which we have referred. To meet the demands of 
these new wants a rise of from one and a half pence to 
twopence (three to four cents) a day was demanded, 
which increased wages to about fivepence (ten cents) a 
day. Nor is it surprising that they did not rise to 
tenpence (twenty cents) a day ; indeed, it was just as 
natural that they should not rise to tenpence as it was 
that they should rise to fivepence, because fivepence 
being sufficient to satisfy their normal wants, ten- 
pence would be more than they could consume, and, 
therefore, would have tended to induce idleness rather 
than to stimulate industry.* Hence, they had no 
motive for demanding it. 

But, another, and the most conclusive proof that the 
rise of wages was the natural effect of the improved 



* See Brassey's experience in raising wages in India above the 
wants of the Hindu, as stated in his book " Work and Wages," pp. 



128 WEALTH AND PROGRESS. 

standard of living, is shown by the fact that the united 
power of wealth, law, and royal authority was not able 
to force them down again. The plague struck Eng- 
land in August, 1348, and continued till January or 
February of the next year. Consequently, during the 
spring and summer of 1349 wages suddenly rose. The 
lords, tenants, farmers, and employers generally, be- 
came alarmed at the prospect. Parliament being 
broken up through the plague, they appealed to the 
king, who, being himself an extensive landowner and 
employer, shared their consternation. There having 
been no rise in the price of provisions, the cost of liv- 
ing, so far as they could see, was unchanged. They 
could hardly be expected to recognize the claims of 
new wants at that early time, when the political econ- 
omy and the statesmanship of the nineteenth century 
still regard all indulgence of new wants as extrava- 
gance needing to be suppressed ; and, as the most 
modern employers often do, they insisted that the de- 
mands of the laborers were unnecessary and unjust and 
should therefore be resisted by the iron hand of au- 
thority. Accordingly, in 1349 the king issued a proc- 
lamation decreeing that no higher than customary 
wages should be paid. It was soon seen, however, 
that the king's mandate was unavailing. His majesty 
then announced that not only would laborers be pun- 
ished for asking higher than the customary rate of 
wages, but severe penalties would also be inflicted 
upon all tenant occupiers, crown tenants, or even upon 
inferior barons, priors or abbots who should be known 
to do so. Many laborers, we are told, were put into 
prison for disobeying the royal edict. 

But all to no effect. The next year (1350) Parlia- 
ment was again called together, for the first time after 



THE STATUTE OF LABORERS. 129 

the pestilence, when by its vote the substance of the 
royal mandate became a law, under that famous title 
"The Statute of Laborers," which was the first legisla- 
tive attempt to deal with wages. And it remained 
upon the statute-book over two hundred years. The 
preamble of this statute complains of the " insolence 
of the servants," who asked for higher wages than had 
been previously paid, " to the great detriment of the 
lords and commons," and ordains 

(1) That no person under sixty years of age, serf or free, except 
those who possessed property, lived by merchandise, or occupied 
land, should refuse to labor for the same wages they were accustomed 
to receive in the twentieth year of the king's reign (1347), which it 
fixes for weeders and haymakers at one penny a day, reapers for the 
first week in August at twopence, and the remainder of harvest three- 
pence a day, and mowers fivepence an acre. They were to be hired 
by the year, month, or day, and receive these wages in wheat or 
money, as the master might decide. 

(2) That the lord shall have the first claim to the labor of the serf, 
and those who refuse to work for him or others at the fixed price are 
to be sent to the common jail. 

(3) That all persons who leave their employments before the expira- 
tion of their contracts shall be punished by imprisonment. 

(4) That even the lords of the manor who shall pay more than this 
amount shall be fined in treble damages. 

(5) That artificers, under which title are enumerated "saddlers, 
tanners, farriers, shoemakers, tailors, smiths, carpenters, masons, 
tilers, pargetters, carters, and others," are liable to the same damages. 

(6) That food must be sold at reasonable prices. 

(7) That alms shall not be given to able-bodied laborers. 

(8) That any excess of wages, either given or taken, shall be seized 
for the king's use, etc.* 

Notwithstanding the fulness and severity of this act, 
the enforcement of which, we may be sure, lacked 

* See Hallam's " History of the Middle Ages," Vol. II., p. 310; 
Rogers's " Work and Wages," p. 228 ; Wade's" History of the English 
Working Classes," p. 9 ; " Wealth of Nations," Book I., ch. 11, Part 
III., p. 141. 



130 WEALTH AND PROGRESS. 

nothing the king and the lords could do, wages rose. 
But while imprisonment of laborers served to increase 
the amount of ungathered crops, it did not prevent the 
ultimate and permanent rise of wages. In spite of the 
royal mandate, statute law, and the personal power of 
the barons, wages rose, as is shown by the bailiffs' rolls 
for the same year, from fifty to seventy-five per cent, 
and, in some instances, even more, although at first, 
in order to harvest their crops and avoid the penalties 
of the statute, which were, doubtless, for some time at 
least, mercilessly inflicted, the bailiffs in their entries 
frequently drew a line through the new price, " fivepence 
a day" and substituted the legal price, " threepence." * 
The new prices were soon openly and regularly paid, 
however, as is seen alike by the bailiffs' rolls and the 
frequent complaints of employers that the statute was 
not enforced. 

When the terrors of the pestilence, the royal edict, 
and the new statute had spent themselves, and " the 
prices paid for labor had been steadied by custom," it 
was found that, regardless of all authority, wages had 
obeyed the natural law, and adjusted themselves to 
the new standard of living, and, accordingly, rose from 
fifty to seventy-five per cent. f Indeed, " the result," 
to use the language of Rogers, " is marked, universal, 
permanent, and conclusive, even if we had not on 
record the complaints of the landowners in Parlia- 
ment, that the ' Statute of Laborers ' was entirely in- 
operative. " \ 

The inability of the combined power of baronial in- 



* " Work and Wages," p. 229. 

f Ibid., p. 233. 

% Ibid., p. 237. See also Eden's " State of the Poor." 



WANTS GOVERN WAGES. 131 

fluence, royal authority, and statute law to prevent 
wages from gravitating toward the cost of living was 
shown by the utter failure of this statute ; and the 
principle that wants govern wages is unconsciously in- 
scribed upon all subsequent legislation on wages, 
which was almost incessant during the next four cen- 
turies. 



CHAPTER V. 

THE RISE OF REAL WAGES ARRESTED BEFORE I45O. 
HOW IT WAS BROUGHT ABOUT. 

FINDING that all the pains and penalties the gov- 
erning classes were able to inflict could not prevent 
wages from rising to the level of the wants of the peo- 
ple, they began to legislate upon what those wants 
should be — i.e., to fix the standard of living by statute 
law. In 1363, in response to the numerous complaints 
that the " Statute of Laborers" was not enforced, al- 
though it had been re-enacted three years previous 
(1360) with the penalty of imprisonment and the brand- 
ing of the forehead with a red-hot iron for its viola- 
tion,* a law was enacted fixing the quantity, qual- 
ity and price of both the food and clothes the laborer 
should have. 

This statute ordains that the servants or laborers of 
lords, artificers or tradesmen shall receive meat, fish, 
or the offal of other victuals, etc., according to their 
station, and that laborers shall wear but one kind of 
cloth, of which the whole piece did not cost more 
than a shilling a yard.f 

* "In 1360 the 'Statute of Laborers' was confirmed by Parlia- 
ment, and the observance of it was enforced, under the penalty of im- 
prisonment for fifteen days and burning in the forehead with a red- 
hot iron in the form of the letter ' F.' If they fled into a town the 
magistrate was to deliver them up under a penalty of £10 to the king, 
and £5 to the master who should reclaim them." — Ederis "State 
of the Poor'' 1 Vol. I., p. 36. 

f Eden's " State of the Poor," pp. 38, 3g. See also Wade's " His- 
tory of the English Working Classes," p. 9. 



THE OUTCRY AGAINST NEW WANTS. 133 

It was soon discovered, however, that the statute of 
1363, fixing the diet and apparel, like its predecessor 
in 1350, fixing the wages, had come too late to be 
effectual. The new wants, which had been gradually 
developing for more than a century previous, had be- 
come too firmly established by custom to be wiped 
out by any mere statutory enactment ; nothing short 
of physical force could now produce that effect. 

The causes which had produced this irrepressible 
change in the wants, and hence in the wages, were 
still active. The trade and commerce of the towns 
was still prosperous, and the social intercourse and the 
needs of the laboring classes were steadily progressing, 
not merely in regard to their food, which is so often 
erroneously taken, even by economists, as the only 
measure of the cost of living, but also in regard to 
dress, furniture, and amusements, which are more civ- 
ilizing than diet. No better evidence of this is needed 
than the general outcry of the rulers and writers of the 
times against the extravagance of the poor.* Knyghton 
declares that " in 1388 the vanity of the common peo- 
ple in dress was so great that it was impossible to dis- 
tinguish the rich from the poor, the high from the low, 
or the clergy from the laity by their appearance. 
Fashions were changing constantly, and every one was 
trying to outdo his neighbor." This is unquestion- 
ably a greatly overdrawn picture of the situation, but 
the very exaggeration proves the fact. If the wants 
of the laborers for dress, etc., had not been materially 
increased, and caused them to become troublesome 



* " The extravagance of dress was the common topic of complaint 
among the historians of that period (last quarter of the fourteenth 
century)." — Eden' s " State of the Poor" Vol. I., p. 37. 



134 WEALTH AND PROGRESS. 

in their demands for higher wages, there could have 
been no ground for this alarm, and no motive for ex- 
aggeration ; in fact, nothing to exaggerate.* 

The rolls of Parliament for that period contain 
evidence of the same fact. They inform us that 
" in the year 1376 the Commons made great complaint 
that the masters are obliged to give their servants and 
laborers great wages to prevent them from running 
away." f Again, in 1378, we are told that " the Com- 
mons complained in Parliament that the ' Statute of 
Laborers ' was not attended to, but that persons em- 
ployed in husbandry fled into the cities and became 
artificers, mariners, and clerks, to the great detriment 
of agriculture." % 

It is thus evident that the employing classes now 
began to recognize the fact that this rise of wages, 
which all the powers of government had so far failed 
to suppress, originated in what was very naturally re- 
garded as the ' ' evil influences of the cities and towns. 
Having treacherously slain Wat Tyler, put to death 
most of his associates, and at least formally suppressed 
his insurrection, Parliament, in 1388, again resumed 
its onerous task of fixing the wants and wages of the 
laboring classes. They now commenced to direct their 
efforts against the real cause of " all their woes," viz., 
the opportunities for social intercourse which had for 



* In referring to Knyghton's clamor against the irrepressible de- 
mands of these increasing wants of the people, Sir Frederick Eden 
wisely observes : " A poor man's vanity would in vain have coveted 
finer clothes than he was used to had not his industry and the im- 
provement in manufactures afforded him the means of gratifying it." 
— " State of the Poor," Vol. I., p. 37. 

■f Eden's " State of the Poor," Vol. I., pp. 42, 43. 

% Ibid., Vol. I., p. 43. 



LAWS LIMITING SOCIAL MOBILITY. 135 

a century and a half been gradually revolutionizing the 
habits and customs of the people. 

This statute,* after prescribing a schedule of prices 
to be paid in the different occupations, which were 
somewhat higher than those of the previous statutes, 
" directs that no servant or laborer should depart from 
one part of the country to another to serve or to reside 
elsewhere, or under pretence of going on a pilgrimage, 
without a letter patent under the king's seal, specify- 
ing the cause of his departure and the time of his re- 
turn, which might be granted by a justice of the peace. 
Every vagrant who could not produce a letter patent 
was to be taken up, put into the stocks and imprisoned 
until he found surety to return to his former master. " f 

Previous legislation had all been directed against the 
results of the new wants, and, consequently, produced 
no real effect upon wages, but this statute directly re- 
lated to the causes which determined the standard of 
living ; and hence, as we shall presently see, was at- 
tended with most disastrous consequences to wages. 
From the date of this statute the causes began to 
operate which finally arrested the rise of wages, and, 
consequently, the prosperity of the English laborers, 
which afterward became practically stationary for more 
than three centuries. Although wages did not imme- 
diately stop rising, it was this and similar statutes 
which followed it that laid the foundation for the fear- 
ful arrest of material prosperity which was consum- 
mated before the middle of the fifteenth century, and 

* 12th Richard II., ch. 3. 

f Eden's " State of the Poor," Vol. I., p. 44. " By a very harsh 
statute in the 12th of Richard II. no servant or laborer could depart, 
even at the expiration of his service, from the hundred in which he 
lived without permission under the king's seal." — " History of the Mid- 
dle Ages" Vol. II., p. 207. 



136 WEALTH AND PROGRESS. 

became so marked in the sixteenth. In fact, this en- 
actment really sustained the same relation to the low 
wages and poverty of the masses during the sixteenth, 
seventeenth, and eighteenth centuries that the char- 
tered towns of the thirteenth century did to the in- 
creased wages, prosperity, and progress of the four- 
teenth and fifteenth centuries. What the charters 
gave this statute took away. The free towns afforded 
opportunity for industrial contact and social inter- 
course and association, which naturally tended to in- 
crease the wants and develop the social and intellectual 
character of the laborer, and to prepare him for the 
freedom he thereby acquired. While the purpose and 
effect of this legislation, so far as it was operative, was 
to destroy all opportunity for travel and social inter- 
course, it prohibited all association, prevented the de- 
velopment of new tastes and wants, and prepared the 
laborer for the despotism and degradation which fol- 
lowed for nearly three centuries after the death of 
Henry VII.* 

That the law of 1388 was rigidly enforced is manifest 
from what immediately followed. The " uplandish 
folk," as the country people were called, properly 
envying the prosperity and freedom enjoyed in the 
towns, f and being now prohibited from leaving the 
place of their birth or changing their occupation after 
twelve years of age, began to send their children 
under that age into the towns, and bind them as ap- 

* Rogers's " Work and Wages," p. 50S. 

\ " It was natural," says Hallam, " that the country people or ' up- 
landish folk,' as they were called, should repine at the exclusion from 
that enjoyment of competence and security for the fruits of their labor 
which the inhabitants of towns so fully possessed." — " History of the 
Middle Ages" Vol. II., pp. 204, 205. 



RISE OF REAL WAGES ARRESTED BY 1444. 137 

prentices to learn some trade or craft — become " arti- 
ficers." In order, therefore, to complete the statute 
of 1388, and make it operate as effectually upon chil- 
dren under twelve as it had done upon all over that 
age, it was further enacted in 1406* " that no person 
whosoever, unless possessed of land or rental of twenty 
shillings a year, shall put a child of any age apprentice 
to any trade or mystery in any city or borough, but 
that children should be brought up in the occupations 
of their parents, or other business suitable to their 
station ;" and this was further strengthened by another 
statute of similar import in 1483. 

It was thus during what Rogers calls " the golden 
age of the English laborer" that the foundation of his 
degradation was laid. The machinery for arresting 
the growth of new tastes and wants among the masses 
was now put into full operation, and we shall soon see 
with what result. Although the tendency of wages 
continued upward for a time, long before the middle 
of the fifteenth century the rise was completely and 
permanently arrested. This is clearly shown by the 
rates of wages as fixed by subsequent statutes, that 
of 23d Henry VI., in 1444, being from seventy to 
ninety per cent above that fixed by the statutes of Ed- 
ward III., Richard II., and Henry IV. in 1350, 1388, 
and i4o6,f and was the highest point they ever reached 
until the depreciation of the currency by Henry VIII. 
in 1545-46 and Edward VI. in 1549-51, which, though 
it increased nominal wages, had no tendency to ad- 
vance real wages. In fact, while through the variation 

* 7th Henry IV., ch. 17. See Eden's " State of the Poor," 
Vol. I., p. 63 ; also Hallam's " History of the Middle Ages," Vol. II., 
p. 207. 

f See Eden's " State of the Poor," Vol. I., pp 65, 66. 



138 WEALTH AND PROGRESS. 

of prices produced by changes in the value of money 
and bad harvests, nominal wages frequently rose dur- 
ing the sixteenth, seventeenth, and eighteenth centu- 
ries, historians agree in assuring us that the general rate 
of real wages never again rose till the present century. 
The effect of this legislation soon began to show it- 
self, and finally proved to be as disastrous to the pros- 
perity and progress of the laboring class as its most 
sanguine projectors could have hoped or desired. In- 
deed, were all other evidence wanting of the fact that 
the rise of wages was permanently arrested before the 
middle of the fifteenth century, it is fully demon- 
strated by the statute of Henry VII., Chapter XL, 
in 1496, and that of Henry VIII. in 1514; for, al- 
though nearly three-quarters of a century had elapsed 
between the statutes of the Sixth and Eighth Henrys, 
during which time several laws regulating the price of 
labor had been passed," the rate of wages as fixed by 
them all was substantially the same, as is clearly shown by 
the following schedule of wages fixed by the statutes of 
Henrys VI., VII., and VIII., in 1444, 1496, and 1 5 14 : 

* See Rogers's "History of Prices," Vol. IV., pp. 17-23; also 
Eden's " State of the Poor," Vol. I., pp. 30-75. 

f The wages of the bailiff in the statute of 1496 are stated by some 
early writers at sixteen shillings and eightpence, which is clearly an 
error. Eden thinks it should be one pound, sixteen shillings and eight- 
pence. But this appears to be equally improbable, as that is as much 
out of proportion to the rate fixed by other statutes as sixteen shillings 
and eightpence. What seems to be more probable, however, is that 
in the earlier copying the figures 1 and 6 have got placed together as 
i6j. instead of £i bs. The probable correctness of this view is sustained 
by the fact, that in the statute of 15 14 where all the other wages are 
exactly the same as in that of 1496, the bailiff's wages are one pound 
six shillings and eightpence. Rogers appears to have taken this view 
also, as he has put it at one pound six shillings and eightpence in his 
" History of Prices." 



RATE OF WAGES IN 1444, 1496, AND 1514. 



139 



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14° WEALTH AND PROGRESS. 

It is difficult to ascertain the exact cost of provisions 
for each year in the foregoing table, but all authorities 
agree that the price of wheat was lower in the first 
than in either of the other years.* If we take Thorold 
Rogers, who, being the most recent writer on prices, 
has had the best opportunities for forming a correct 
estimate, we find that the price of wheat in 1444 f was 
three shillings and elevenpence three farthings a 
quarter. In 1496,^: according to the same writer, it 
was five shillings and fivepence halfpenny, and in 
1 5 14 § it was five shillings and fourpence. If we take 
the average for the decades in which each of these 
years occur, which is still better, we find the result to 
be the same. The average price of wheat from 1441 
to 1450 |j was five shillings and threepence three far- 
things ; from 1491 to 1500 it was five shillings and three 
farthings, and from 1 5 1 1 to 1520 it was six shillings 
and eightpence three farthings. 

It is therefore very clear that while nominal wages 
in a few cases were a fraction lower, real wages were, 
if anything, higher in 1444 than at either of the other 
periods, which conclusively shows that the rise of real 
wages was unmistakably arrested before the middle of 
the fifteenth century. 

Nor were the evil effects of those enactments con- 
fined to the ' ' uplandish folk, ' ' but it affected the towns 
also. The statutes of Richard II. and Henry IV. vir- 
tually cut off the industrial and social intercourse be- 

* See Tooke's "History of Prices," Vol. VI., pp. 423, 424, 425 ; 
" Wealth of Nations," conclusion of Book I., p. 206 ; Arthur Young's 
" Progressive Value of Money;" Eden's "State of the Poor," and 
Rogers's " History of Prices," Vol. IV. 

f " History of Prices," Vol. IV., p". 2S4. 

% Ibid., p. 286. § Ibid., p. 288. || Ibid., p. 292. 



DECLINE OF THE CHARTERED TOWNS. 141 

tween the laboring classes in the country and those in 
the towns, which was necessarily very inimical to the 
growth of the population and prosperity of the latter. 
Several circumstances contributed to this result. 
Under these conditions the population of the country, 
or " open towns," as they were called, naturally in- 
creased. While the police system was as yet by no 
means perfect, the necessity of walled towns to protect 
the industry and commerce of the burgesses against 
the depredations of the lords had largely disappeared. 
With the fall of feudalism and the abolition of serfdom 
and villeinage there had naturally begun to grow up a 
middle class, who were neither barons nor laborers ; 
and as the exclusive privilege of the Guilds in the 
chartered towns prohibited all except members from 
entering trade or manufacture, this class naturally set- 
tled down in the open towns, where they were free 
from the exactions of the Guilds, which had now be- 
come very despotic. 

Thus manufacture, trade, and commerce began to 
develop in the open towns,* and in the chartered 
towns they began to decline. f 

So marked was this that by the end of the fifteenth, 
or early in the sixteenth, century the chartered towns 

* Birmingham and Manchester were very prosperous towns early 
in the sixteenth century. In the 33d Henry VIII., Manchester is re- 
ferred to as having a large industrious population " well set to work 
in making of cloths as well of linen as of woollen, whereby the in- 
habitants of said towns have gotten and come unto riches and wealthy 
living," etc. 

f " It is highly probable," says Rogers, " that some of this decay 
is due to the spread of woollen manufacture into country places where 
the charges of the Guilds did not apply." — " Six Centuries of Work 
and Wages." 

Hume and Wade say substantially the same thing. 



142 WEALTH AND PROGRESS. 

and cities had lost all their power and prestige. The 
preamble of 3d Henry VIII. complained that " most 
cities, boroughs, and towns corporate had fallen into 
decay and were no longer inhabited by merchants and 
men of substance," and the 6th Henry VIII. (in 1 5 1 5) 
also complained of the decay of the towns, setting 
forth that the number of men, women, and children 
occupied in industry was lessened ; that husbandry had 
decayed, and that churches were destroyed, divine 
offices neglected or suspended,* and before the mid- 
dle of the century they had not only lost their political 
power, but the property of the Guilds was confiscated 
by the king. 

Thus, although the statutes of 13S8 and 1406 did 
not produce any immediate effect upon wages, by cut- 
ting off the opportunities for the development of new 
wants among the laborers, they set in operation the 
causes by which, before the middle of the fifteenth 
century, the rise of wages was permanently arrested, 
the free towns finally overthrown, and the people pre- 
pared for the degradation and despotism that awaited 
them at the hands of their Tudor and Stuart rulers. 
So long as the statutes were enacted against the wages 
based upon the wants already developed, they were 
economically harmless, but when they were directed 
against the opportunities which create the wants, they 
at once became disastrously effective. Thus the ter- 
rible industrial events that followed the accession of 
Henry VIII., if not the inevitable result of, were 
certainly made possible by those which preceded it. 
The Act of Settlement of Charles II., in 1662, though 



* See Wade's " History of the English Working Classes," p. 17 ; 
also Rogers's " Work and Wages," p. 339. 



THE TRUE CAUSE OVERLOOKED. 143 

enacted for opposite reasons, was the natural result of 
that of Richard II., in 1388. 

I have dwelt more at length upon these facts than 
would have been necessary in a treatise of this nature, 
had not their connection to wages hitherto been en- 
tirely overlooked by both historians and economists. 
Even Mr, Rogers, in his excellent work, in which he 
takes both characters, has omitted to notice their 
economic importance. He appears to have fallen into 
that common mistake of attributing the rise or fall of 
wages to the circumstance most prominent at the time 
or immediately preceding the change, which is almost 
certain to be erroneous. Cause and effect in economic 
movements are seldom prominently in view at the 
same time. The operation of natural law in economics 
is so slow and gradual that the cause of any real and 
permanent change in wages and industrial conditions 
is invariably to be sought for in circumstances that have 
ceased to be prominent long before the effects are 
generally observable. 

Thus, instead of ascribing the rise of real wages and 
consequent prosperity and progress that took place in 
the fourteenth and fifteenth centuries to the natural 
causes which began to operate in the early part of the 
thirteenth century, he attributes it to accidental cir- 
cumstances (the famine and the plague), which oc- 
curred the same year the rise took place. And, again, 
instead of attributing the stagnant, if not declining 
economic status of the English laborer during the six- 
teenth, seventeenth, and eighteenth centuries to the 
causes which began to operate in the last quarter of 
the fourteenth, and succeeded in permanently arrest- 
ing the rise of wages before the middle of the fifteenth 
century, he ascribes it all to the vicious blunders of 



144 WEALTH AND PROGRESS. 

Henry VIII. * In truth, however, if the causes which 
produced the change in the fourteenth century had 
been allowed to continue, the mere debasement of the 
currency or plunder of the Guilds by Henry could 
not have produced any permanent change in real 
wages. In fact, the natural causes which develop the 
wants and tend to increase real wages ceased to oper- 
ate at the close of the fourteenth, and did not com- 
mence again on a general scale till the latter part of 
the eighteenth century ; consequently, there was no 
permanent rise of real wages for nearly four centuries. 

* " Work and Wages," pp. 324, 325, 345, 378. 



CHAPTER VI. 

MOVEMENT OF WAGES FROM THE FIFTEENTH TO THE 
NINETEENTH CENTURY. 

SECTION I. — Why Nominal Wages do not Rise and 
Fall zvith the Rise and Fall of Prices. 

We have seen in the previous chapter that the social 
influences which tend to develop new wants in the 
laborer, and consequently raise his standard of living 
and advance real wages, were effectually arrested by 
the second quarter of the fifteenth century, and that 
real wages were practically stationary during the 
greater part of the four following centuries. 

During this period, therefore, the cost of living was 
affected only by those causes which operate upon the 
price of commodities, such as changes in the currency, 
good and bad harvests, and only influenced nominal 
wages. Consequently, if our theory be correct, wages 
(nominal wages, of course) will be found not only to 
rise with the rise of prices, but also to fall with the 
fall of prices ; which is just what the industrial history 
of the sixteenth, seventeenth, and eighteenth centuries 
shows us did take place. Although there was, for the 
reasons before stated, no appreciable rise of real wages, 
nominal wages rose more than fourfold. This is the 
more remarkable because during that time wages were 
not allowed to freely follow the natural course of 
economic movement, but were fixed by authority, with 
the persistent effort to keep them at the minimum. 



146 WEALTH AND PROGRESS. 

Although the monarchical power was more absolute at 
this period than it was in the fourteenth century, it 
proved to be as impossible for royal authority and 
statute law to prevent wages from gravitating toward 
the cost of living under the Tudors and Stuarts as it 
did under the Plantagenets. 

It should always be remembered, however, that in 
thus laying' it down that real wages are governed by 
the standard of living, and that, c ceteris paribus, nom- 
inal wages are ultimately governed by prices, it is not 
claimed that nominal wages always rise and fall simul- 
taneously with the rise and fall of prices. If prices 
never varied except from the gradual operation of 
social and economic causes, this would be true, or so 
nearly true that no general disparity between prices 
and wages would ever exist. But this is not, nor is it 
possible that it can be, the case where the change of 
prices is sudden and artificial. The price of labor is 
always less susceptible to the sudden influence of arti- 
ficial causes than that of commodities. The reason 
for this, on a moment's reflection, becomes very clear. 
The sellers of labor are more numerous, and, therefore, 
each one possesses a much smaller proportion of the 
whole amount offered for sale than the sellers of com- 
modities. Besides, they are more ignorant, more 
necessitous, and that which they have to sell is much 
more perishable. Therefore, if they have the incen- 
tive^ — which they have not — they have neither the 
ability nor opportunity to study and anticipate the 
sudden changes in prices produced by artificial causes, 
as is constantly being done by the sellers of com- 
modities. For example, in the case of a bad harvest, 
or other cause known to affect the price of commod- 
ities, it is a common occurrence for merchants to put 



WAGES ALWA YS THE LAST TO RISE OR FALL. 147 

up the price of wheat, coal, or whatever is on hand, 
long before any portion of the short supply reaches 
the market. But this is not the case with labor. 
Upon learning that, through a failure of crops or a 
change in the value of money, the prices of pro- 
visions are likely to advance, the laborer does not at 
once put up the price of his labor, nor does he do this 
immediately after the advance of prices. It is not 
until his wages fail to procure for him what, according 
to his established habits, have become necessities, that 
he, with any degree of seriousness, begins to insist 
upon having a higher price for his labor. 

It is because wages thus move much slower than 
prices — when the latter are suddenly affected — that we 
often see prices rise and fall again, without any change 
taking place in wages. But while wages are slow to 
rise, they are for the same reason slow to fall.* Al- 
though the laborer is very tardy in making a demand 
for higher wages, he is also very reluctant to submit 
to a reduction, which fact explains why so many 
strikes are instituted to resist a fall, and so few to 
enforce a rise of wages. 



* According to all experience, whether within modern observation 
or recorded in history, it may be laid down as an established maxim 
that labor is the last of the objects of exchange to rise in consequence 
of dearth or depreciation, and that commonly the price of labor is the 
last to fall in consequence of increased abundance of commodities or 
increased value of money." — Tooke s "History of Prices," Vol. I., p. 71. 



148 WEALTH AND PROGRESS. 

SECTION II. — Wages and Prices in the Sixteenth Cen- 
tury — The Effect of Henry VIII. 's Depreciation of the 
Currency. 

In considering the law of zv ages, however, the ques- 
tion is not what decides wages at any particular time, 
but what determines the general direction or tendency 
of wages through all time. Consequently, the question 
is not what are the facts for this or that year, nor for 
any particular years in this or that decade, but what 
are the facts for a considerable number of years or dec- 
ades taken together. For it is impossible to form any 
approximately correct conclusion as to the economic 
tendency of wages unless our observations extend 
over a sufficiently long period for the causes that have 
operated upon both wages and prices to have fully 
spent themselves. This is what Thorold Rogers, in 
discussing the movement of wages during this period, 
fails to do. As an historian he may, in the main, be 
relied upon ; but as an economist he is erratic, incon- 
sistent, and often unsound, his conclusions frequently 
being strangely at variance with his own data. This 
is strikingly apparent in his discussion of the move- 
ment of wages from the fifteenth to the nineteenth 
century. Because during that period there was at times 
a disparity between the movement of wages and that 
of prices, he concludes that they sustain no important 
economic relation to each other. 

Upon the assumption that wages " do not rise with 
prices," he concludes that every advance in prices is 
necessarily inimical to the laborer,* as the increase 

* " As, therefore, wages do not rise with prices, no crime against 
labor is more injurious than expedients adopted on the part of Gov- 
ernment which tend to raise prices." — " Work and Wages" p. 429. 



THE LABORER IN "1877" AND IN "1450." 149 

goes to profits at the expense of wages.* The fact 
that during the period under consideration, through 
depreciations of the currency, bad harvests, etc., 
prices of provisions rose, he affirms that the economic 
condition of the laborer was worse, very much worse, 
during the seventeenth, eighteenth, and the first half 
of the nineteenth centuries than it was in the fifteenth. 
Indeed, he even goes so far as to say that the highest- 
paid mechanics in London at the close of the third 
quarter of the nineteenth century had not reached the 
economic eminence occupied by their ancestors in the 
middle of the fifteenth century. In other words, that 
the English laborer was not as well off in " 1877 " 
with " forty-two shillings and ninepence a week" (ten 
dollars and seventeen cents), and occupying a four or 
six-room house with modern appointments, as he was 
in 1450 with " three shillings and fourpence a week" 
(eighty cents), occupying a hut without chimney, 
window, or sanitation, or anything that can be prop- 
erly dignified by the name furniture. The fact that 
some of Mr. Rogers's most pessimistic and least war- 
ranted statements regarding the relative economic con- 
dition of the laborer during these periods are constantly 
being quoted to sustain palpable economic heresies is 
my apology for dwelling here upon what otherwise 
might be properly regarded as unnecessary detail. 

In support of his statements that " wages do not 
rise with prices, and that the condition of the laborer 
was from fifty to seventy per cent better in the fifteenth 
than it was in the seventeenth and eighteenth cen- 
turies," he compares wages and the price of wheat at 



* " It is assuredly from the stint of wages that the profits of middle- 
men have been derived." — " Work and Wages" p. 544. 



150 WEALTH AND PROGRESS. 

the close of the former with those of exceptionally 
dear years during the latter centuries. 

Of course, if we compare the wages and the price of 
wheat in 1495 with those of 1725, 1770, and 1795, the 
dates to which Mr. Rogers most delights to refer, we 
shall find that the legal wages did enable the laborer 
to procure more food in the former than in the latter 
years. But this fact does not necessarily prove 
either that wages do not tend to rise with the rise of 
prices or that the laborer's general condition was really 
worse in the latter period than in the former. While 
these facts are correct, their comparison for such a 
purpose is extremely treacherous and misleading. 
True, they give the actual state at particular dates, 
but they contribute little toward showing the general 
condition, and nothing toward establishing general 
tendencies, simply because they represent only tem- 
porary extremes. The price of wheat in 1495 was 
four shillings and three farthings* a quarter, being, 
with two or three exceptions, lower than at any time 
for two hundred years. In 1725, 1770, and 1795 it 
was at famine prices, in the last-named year being five 
pounds and four shillings, f the highest ever known 
down to that date. In each of these years, however, 
as the facts given elsewhere by Mr. Rogers show, 
wages began to rise toward the prices, and were fre- 
quently supplemented from other sources, as we shall 
hereafter see. Therefore, to cite the wages and prices 
at such dates to indicate the general industrial con- 
dition of the period, is not only unfair, but fallacious. 



* Rogers's " Work and Wages," p. 389. Adam Smith puts it at 
three shillings and fourpence. 
f Ibid., p. 486. 



AVERAGES THE ONLY RELIABLE DATA. 151 

No data, we repeat, can be of any real importance 
for such a purpose that does not enable us to compare 
the wages and prices of both good and bad years taken 
together for a considerable period — say several decades, 
at least. 

Fortunately, such data are at hand sufficient to 
clearly indicate the direction of the general move- 
ment of both prices and wages. From the middle of 
the reign of Henry VI. to that of Henry VIII. (1444- 
1540) both real and nominal wages were practically 
unchanged, the average wages of the artisans through- 
out the country being about sixpence, and those of 
common laborers fourpence a day.* Henry VIII. 
began to issue what Rogers so bitterly designates 
"base money" in 1545-46, which example was fol- 
lowed by his son, Edward VI., in 1549-51 ; and it 
was restored nine years afterward (1560) by Elizabeth. 
This change in the currency was, of course, followed 
by a general rise in prices, to which Mr. Rogers attrib- 
utes all the ills of the English laborer from the 
middle of the sixteenth to that of the nineteenth cen- 
tury, f 

Now, Mr. Rogers has himself furnished us with a 
complete schedule of wages and the price of wheat, % 
which is the best indication of the cost of living during 
that period — for six and a half successive decades of the 
most important part of the sixteenth century — viz., 
from 1520 to 1582, inclusive, as here given : 

* Rogers's " Work and Wages," p. 388. 

f " The effect of Henry's and Edward's base money, though it 
lasted only sixteen years, was potent enough to dominate in the his- 
tory of labor and wages from the sixteenth century to the present 
time (1880)." — " Work and Wages" p. 345. 

X " History of Prices," Vol. IV., p. 731. 



'5* 



WEALTH AND PROGRESS. 



Price of 

Wheat per 

Quarter. 



I520 
1521 
J522 
1523 
1524 
1525 
1526 

1527 
1528 
1529 
I530 
1531 
1532 
1533 
1534 
1535 
1536 
1537 
1538 
1539 
I540 
I 541 
1542 

1543 
1544 
1545 

1546 
1547 
T54S 
1549 

I550 



Average.. 



9 
7 
6 

5 
5 
5 
6 

12 



7 

7 

10 

10 

7 
6 

5 
5 
9 
7 
9 
9 
15 



16 
18- 



d. 
4i 

oi 

6 
it 

5 

2i 
II 
IOj 
IO 

5 

al 

o 

8 

o 

3i 

7i 
I 

III 

8| 

Oir 

Hi 

3i 

oi 
6| 

3+ 
11 

-■-4 

4 
o 



•74- 



Weekly 
Wages. 



d. 

9 
7i 

8 

7i 

8 

7i 

8i 

ioj 

9* 

9 



9^ 
10 

Hi 
ioi 

74 

Hi 

8J 

9i 
ioi 

io| 
II 

ioi 

7f 
I of 

ai 
6 

4 



Years. 



9l 



55i 
552 
553 

554 
555 
556 
557 
558 

559 
560 

56i 

562 
563 
564 
565 
566 
567 
568 

569 
570 
571 

572 
573 
574 

575 
576 

577 
578 

579 
580 

58i 
582 



Average.. 



Price of 
Wheat per 
Quarter. 



20 
IO 
IO 

18 

22 

28 

8 

9 
11 

14 
15 
10 
19 
10 
10 
16 
11 
11 
11 

9 
12 

13 
26 

14 
15 
22 
20 
17 
17 
20 
21 
19 



d. 

4 
6| 

o 

Si 
oi 

5i 
4i 
3i 
o| 

24 

8 
Hi 

9i 

ioi 

7 

5i 
I 

3i 
9i 
10 

5i 
of 
3f 
24 
11 
2? 
2 

41 
61 
o 

k4 

34 

il 



Weekly 
Wages. 



15 



d. 

I* 
Hi 

6* 
"i 

o£ 

31 
ioi 

6 

of 

o 



oi 

7 

7! 

84 

i* 

6i 
11 

7 

74 
i°i 

8 
11 

Si 

1 of 

8 

9* 

"i 
5i 



61 



This table includes thirty-one years before and 
thirty-two years after Henry's and Edward's depre- 
ciation of the currency, and therefore affords a good 
opportunity for observing whether or not nominal 
wages tend to move in the same direction as prices. 
It will be observed from the table that many times 
during those sixty-three years there appears to be a 
great difference between the movement of prices and 



THE A VERAGE RISE IN WHEA T AND WAGES. 153 

that of wages. For example, in 1526 the average 
price of wheat was six shillings and twopence half- 
penny per quarter, and wages two shillings and eight- 
pence farthing per week. The next year, 1527, wheat 
rose over one hundred per cent, the average price 
being twelve shillings and elevenpence ; but there was 
a good harvest in 1528, and wheat fell again to eight 
shillings and tenpence farthing. Meantime, wages 
only rose to two shillings and ninepence halfpenny. 
Thus, while the price of wheat rose over one hundred 
per cent, it remained up so short a time that wages 
only rose twopence, or about sixteen per cent. On 
the other hand, in 1556 wheat had risen to twenty- 
eight shillings and fivepence halfpenny per quarter, 
and wages to four shillings and threepence farthing 
a week. The next year the price of wheat fell to 
eight shillings and fourpence three farthings, or about 
seventy-five per cent, while wages only fell to three 
shillings and tenpence farthing, or about ten per cent. 
If, however, we take the average wages and the 
price of wheat for the whole three decades before 
the issue of the " base money" — 1520 to 1550, inclu- 
sive — we find that wheat for the whole period was 
eight shillings and sevenpence halfpenny per quarter, 
and wages were two shillings and ninepence three 
farthings a week. Thus, as compared with 1520, the 
price of wheat fell eight per cent, while wages re- 
mained about the same. Taking the thirty-two 
years after the change in the currency, the average 
price of wheat was fifteen shillings and eightpence 
per quarter, and wages were four shillings and seven- 
pence a week. Hence, as compared with 155 1 (the 
first of the thirty-two years), the average price of 
wheat fell about twenty-three per cent, and the aver- 



154 WEALTH AND PROGRESS. 

age wages for the same period rose about ten- per cent. 
If we take the whole period, which is the only true 
way, we find the average price of wheat for the sixty- 
three years was twelve shillings and twopence three 
farthings per quarter, and wages were three shillings 
and eightpence one farthing. Thus, as compared 
with 1520, the price of wheat rose twenty-eight per 
cent and wages twenty-seven per cent. 

If we examine the statutes fixing the legal rate of 
wages during that period, the object of which was to 
prevent wages from rising, we shall find that they, 
too, followed the movement of prices. Early under 
the reign of Elizabeth (1563) an act was passed author- 
izing the county magistrates to meet twice a year and 
" fix the rate of wages in accordance with the times." 
The preamble of this statute dilates upon " the grief 
and burdens of the poor laborer and hired man," and 
solemnly declares that on account of the high prices 
' ' the wages of laborers are too small and not answerable 
to these times." Even if this was all hypocritical cant, 
and the whole purpose of the statute was to prevent 
wages from rising, as Mr. Rogers claims, it only the 
more clearly proves the impossibility of preventing 
wages from gravitating toward the cost of living. 

In pursuance of this statute, the magistrates through- 
out the country met at Michaelmas and Easter (spring 
and fall) to fix the rate of wages according, in the 
words of the Rutland magistrates in 1564, to "the 
price of linen, woollen, leather, corn (wheat), and 
other victuals. " In doing this, it is needless to say, 
they put them up as little and down as much as pos- 
sible. But the records of the semi-yearly proclama- 
tions of these magistrates clearly show that the wages 
were increased and diminished according to the rise 



WAGES FIXED BY THE PRICE OF BREAD. 155 

and fall in prices, mainly of wheat, which was then the 
staple article of food.* 

To such an extent was the cost of living uncon- 
sciously recognized as the standard of wages, that a 
sliding scale was adopted by which wages should rise 
and fall with the variation in the price of bread. In 
1795 the Berkshire magistrates decided that when the 
"gallon loaf" cost one shilling the laborer should 
receive from the parish sixpence a day and three- 
pence a day for each of his family, f and for every rise 
of one penny in the price of the loaf, he should receive 
an increase of threepence a week for himself and one 
penny a week for each of his children. This plan was 
so popular that bills were twice introduced into Parlia- 
ment to make it a law, and, although it failed to 
become a statute, it was sustained by the courts,;}; and 
became a general practice, supplanting the system of 
fixing wages by statute law. But economic wages 
being governed by the cost of living, the allowance 
system could make no permanent difference to the 
laborer. While it might enable the employer to pay 
less, it did not give the laborer more. What he lost 
in wages he received in allowance, and what he re- 
ceived in allowance he lost in wages. This, indeed, is 
now generally admitted by all economists. 

' There is a rate of wages," says Mill,§ " either the 
lowest on which the people can, or the lowest on 
which they will consent, to live. . . . Their habits 

* See Rogers's " Work and Wages ;" also Eden's " State of the 
Poor." 

f See Eden's " State of the Poor," Vol. I., p. 577. 

\ " Work and Wages," p. 437. 

§ " Principles of Political Economy," Book II., ch. 12, § 4, pp. 
450-452. 



156 WEALTH AND PROGRESS. 

will not be altered for the better by giving them parish 
pay. ... It is well known that the allowance sys- 
tem did practically operate in the mode described, and 
that under its influence wages sank to a lower rate 
than had been known in England before. . . All sub- 
sidies in aid of wages enable the laborer to do with 
less remuneration, and therefore ultimately bring 
down the price of labor by the full amount, unless a 
change be wrought in the ideas and requirements of 
the laboring class — an alteration in the relative value 
which they set upon the gratification of their instincts 
and upon the increase of their comforts and the com- 
forts of those connected with them." 



SECTION" III. — Wages and Prices during the Seven- 
teenth, Eighteenth, and Nineteenth Centuries. 

If we examine the general movement of wages and 
prices during the seventeenth, eighteenth, and nine- 
teenth centuries we find the same tendency constantly 
observable. The average price of wheat during the 
first decade in the seventeenth century was twenty- 
nine shillings per quarter, and, according to Arthur 
Young, the average price for the whole century was 
thirty-eight shillings and twopence, being a rise of a 
little less than one third for the whole century. The 
average rate of wages at the commencement of the 
century was four shillings a week, and, according to 
the above authority, the average rate of wages for the 
century was tenpence and three farthings a day, or 
about five shillings and fivepence a week, being a 
rise of thirty per cent for the whole period. So, too, 
with the eighteenth century. The price cf wheat at 



AVERAGE WAGES AND PRICES FROM 1700 TO 1800. 157 

the commencement of the century (1701) was, accord- 
ing to Tooke, twenty-eight shillings and fivepence per 
quarter, and the average for the whole century was 
thirty-eight shillings and sevenpence one farthing, or 
a rise of about one fourth, although, as will be seen, 
it is only fivepence a quarter higher than the average 
for the previous century. The average wages at the 
beginning of the eighteenth century were about six 
shillings a week — agricultural laborers five shillings 
and sixpence, and artisans seven shillings and sixpence 
a week. The average wages from 1701 to 1730 rose 
to six shillings for agricultural laborers and nine shil- 
lings for artisans. From 1731 to 1800 they were eight 
shillings a week for the former and sixteen shillings 
for the latter, the average for the century being about 
seven shillings a week for agricultural laborers and 
twelve shillings and sixpence for artisans, or, both 
taken together, eight shillings and threepence a 
week, showing an average rise for the whole period of 
forty per cent.* Thus it will be observed that the 
average rise in the price of wheat and labor for the 
whole century over that which prevailed at the com- 
mencement of the century is about the same ; but, as 
compared with the average of the previous century, 
it will be seen that wages rose over fifty per cent, 
while wheat rose less than ten per cent. Therefore, 
although during the greater part of this period wages 
were nominally fixed by authority, while prices were 
left free to move in accordance with economic influ- 

* For more full information upon this point we refer the reader to 
Arthur Young's "Journey Through England" (1767), Eden's "State 
of the Poor," Tooke's " History of Prices," Rogers's " History of 
Prices," Porter's " Progress of the Nation," Wade's " History of the 
Working Classes," and Levi's " Wages and Earnings." 



158 WEALTH AND PROGRESS. 

ences, the united power of wealth and law could not 
prevent them from moving in the same direction. 

It is true that during this period the whole influence 
of the authorities was used to keep wages at the 
minimum, and often with considerable success ; but it 
is also true that in proportion as the government suc- 
ceeded in preventing wages from keeping pace with 
prices or the cost of living, it was compelled to call 
for and finally by law enforce public contributions, as 
under the poor law and the allowance system, to make 
up the deficiency. By this means, which was the in- 
evitable result of arbitrary interference with the nat- 
ural movement of wages, the laborer's income, as 
before stated, was eked out from the public funds, 
according to the size of his family and the price of 
provisions. " 

Thus, for the same reason that the pains and pen- 
alties of Edward III. and Richard II. were unable 
to prevent real wages from moving in the direction of 
the improved standard of living in the fourteenth cen- 
tury, those of the Tudors and Stuarts and Brunswicks 
were unable to prevent nominal wages from moving in 
the same direction as prices in the sixteenth, seven- 
teenth, and eighteenth centuries. When we reach the 
nineteenth century, however, we find the other set of 
causes to which we have so often referred as affect- 
ing real wages again beginning to operate. From 
causes fully set forth in another chapter, f the spinning- 
jenny and the power-loom came into existence, which 

* A full table of the scale by which the wages were to be supple- 
mented by parish allowance, according to the price of bread and the 
number of the family, will be found on page 577 of Vol. I. of Eden's 
" State of the Poor." 

f This chapter is unavoidably deferred to the next volume. 



WHY REAL WAGES AGAIN' ROSE. 159 

made congregated industry and the factory system of 
production possible. The towns thus again became 
manufacturing and commercial centres, through which 
industrial and, consequently, social contact again be- 
came an active force among the masses, at least among 
those engaged in the manufacturing and mechanical 
industries. 

From these changed conditions new desires and 
wants soon arose, and new habits began to be formed, 
the influence of which, though unconsciously exercised, 
soon became visible in a higher standard of living and, 
consequently, a general and gradual but persistent and 
continuous rise in real wages. This fact was clearly 
observed by Tooke, who, speaking of the rise of wages 
at the commencement of the present century, says : 
" The wages of agricultural laborers and artisans had 
been doubled, or nearly so. Salaries from the lowest 
clerk up to the highest functionaries, as well as profes- 
sional fees, had been considerably raised on the plea of 
greatly increased expenses of living, not only by the 
increased price of necessaries, but by a higher scale of 
general expenditure or style of living incidental to the 
progress of wealth and civilization.'" * 

From this time on, quantity instead of price again 
became the controlling element in the cost of living ; 
and, consequently, we find wages in the nineteenth 
century, as in the fourteenth, constantly moving toward 
the standard of living rather than the price of commod- 
ities, which is the only movement of wages that can 
ever increase the wealth of the laborer and really pro- 
mote human progress. This also explains why, during 
the present century, wages have risen and prices fallen 



" History of Prices," Vol. I., pp. 329, 330. 



160 WEALTH AND PROGRESS. 

at the same time, instead of the former constantly 
following the latter, as in the sixteenth, seventeenth, 
and eighteenth centuries. 

This, I repeat, is because during the former period 
the wants, habits, and standard of living, and, conse- 
quently, real wages were practically stationary ; and, 
therefore, all variation in wages was merely nominal, 
rising and falling only as the prices of the commodities 
used by the laborer rose and fell, the quantity of 
wealth he received remaining essentially the same ; 
while in the present century the wants and habits of 
the laboring classes have greatly improved, and when, 
through the use of machinery, the price of com- 
modities fell, instead of wages falling in the same ratio, 
as formerly, the new wants, as in the fourteenth cen- 
tury, absorbed the difference, thereby raising the 
standard of living and increasing real wages. 

The operation of this principle is clearly seen in the 
striking difference between the movement of the wages 
of the agricultural laborers and that of those of the 
artisans and others engaged in manufacturing indus- 
tries generally. It will be remembered that during the 
three centuries in which the standard of living was 
stationary, the wages of the artisans and laborers in 
husbandry always rose and fell together, and that, too, 
in a similar if not in the same ratio. But during the 
present century the wages of the agricultural laborers 
have made very little progress, while those in the 
manufacturing industries have risen, in most cases, 
over a hundred per cent.* Nor is the reason for this 



* See Levi's " Earnings and Wages;" Porter's " Progress of the 
Nation ;" Inaugural Address of the President of the London Statistical 
Society, 1883 ; Report of Bureau of Statistics of Labor, Massachusetts, 
1S84-85. 



AGRICULTURAL WAGES DID NOT RISE. 161 

t 
very difficult to understand. It is because the social 

influences which develop the wants and raise the 
standard of living among the laborers in the manu- 
facturing and commercial centres have not operated 
upon the agricultural laborers, and, consequently, their 
wages have done little more than follow the movement 
of prices.* 

* It is notorious, however, that agricultural wages are always 
higher in the immediate vicinity of manufacturing centres. Rogers 
has observed this fact, and says : " The wages paid to agricultural 
laborers in the manufacturing districts of England are far in excess 
of those customary in purely rural parts." — "Work and Wages," 
p. 172. 



CHAPTER VII. 

UNIVERSALITY OF THE LAW OF WAGES. 

SECTION I. — Wages and Cost of Living in Different 
Countries and Industries. 

THE doctrine that wages are ultimately governed 
by the cost of living is susceptible of universal appli- 
cation. It furnishes as complete an explanation of 
the variation in wages in different countries, locali- 
ties, and industries as we have seen it does of the 
different periods in the same country. The cost of 
living is higher in large cities than in small towns for 
two reasons : first, because the price of a few things, 
such as house rent, is higher in the cities than in the 
country, and, second, because a larger number of ex- 
penditures enter into the daily economy of the laborers 
in the cities than in that of those in the country. To 
the extent that this is due to the former cause it affects 
only nominal wages, and to the extent that it arises 
from the latter influence it affects real wages. But by 
whatever cause this is produced, the fact is universal ; 
and the fact that wages in similar industries are higher 
in large cities than in the country is, and ever has 
been, equally universal. And for the same reason we 
find wages the world over are invariably lower in agri- 
cultural than in manufacturing industries. Even in 
India, Buchanan found the wages of the Sudras much 
higher in the cities and immediate vicinity than in the 



WAGES IN LARGE AND SMALL CITIES. 163 

country.* Accordingly, wages are always higher in 
London than in Manchester, Birmingham, Leeds, or 
Edinburgh, and higher in these places than in the 
rural towns. 

In the thirteenth century, when the wages system 
first began to dawn in England, Rogers tells us f " the 
wages of agricultural labor were higher in the eastern 
counties ,and the neighborhood of London than in the 
rest of England." And he adds : ^ In London " the 
wages were from twenty-five to thirty per cent over 
the rates paid in other places." When considering 
"the present situation," he says :§ " London wages 
were about twenty-five per cent more than country 
wages of the same kind." Adam Smith observed the 
same fact, which was evidently as marked in his day 
as it is at the present time, for he says : | " The wages 
of labor in a great town and its neighborhood are fre- 
quently a fourth or a fifth part, twenty or five and 
twenty per cent, higher than at a few miles distance. 
Eighteenpence a day may be reckoned the common 
price of labor in London and its neighborhood. At a 
few miles distant it falls to fourteen and fifteenpence. 
Tenpence may be reckoned its price in Edinburgh and 
its neighborhood ; at a few miles distant it falls to 
eightpence. " 

The same is true of this and all other countries 
where wage conditions prevail. The fact that wages 
in the various trades in New York City are from 
twenty-five to seventy-five cents a day more than in 

* Buchanan's " Journey Through the Countries of Mysore, Canara, 
and Malabar," pp. 124, 125. 
f " Work and Wages," p. 171. 

% Ibid., p. 327. § Ibid., pp. 180, 536. 

|| " Wealth of Nations," Book I., ch. 8, pp. 57, 58. 



1 64 WEALTH AND PROGRESS. 

the small cities and towns in that and other States, is 
explainable only on the same principle. 

In Fall River, Mass., for example, the wages of 
carpenters, painters, masons, and bricklayers are (1886) 
from two dollars and fifty cents to three dollars a day ; 
while in New York City they are from three dollars 
and fifty cents to four dollars and fifty cents. Com- 
mon laborers in the former city receive from one dollar 
and twenty-five cents to one dollar and fifty cents a day, 
while those in New York receive from one dollar and 
seventy-five cents to two dollars, and those employed 
by the city two dollars and fifty cents. So universally 
is this true that it is recognized by both employer and 
employed. Even trades unions' schedules and masters' 
prices, both in Europe and this country, are based 
upon it. Not that they agree upon any theory of 
wages, but because they are both compelled to observe 
the fact. This is equally true of the same industries 
in different countries. Without regard to climate, 
political institutions, or social conditions, wherever 
the cost of living is low, whether from the cheapness 
of things or the fewness of the wants, small wages are 
invariably paid, and vice versa. 

The testimony of Sir Thomas Brassey upon this 
point is ample and conclusive ; and his evidence is 
especially important because of his exceptional oppor- 
tunities for obtaining the facts in relation to wages and 
cost of living in so many different countries, with the 
data of his father's experience, who employed a larger 
number and greater variety of laborers in more differ- 
ent countries than any other man. He says :* " The 
minimum is determined by the cost of living, accord- 

* Brassey' s " Work and Wages," pp. 94, 95. 



WAGES IN DIFFERENT COUNTRIES. 165 

ing to the standard adopted by the people. ... As 
we recede from the more civilized countries of Europe 
the standard of comfort is reduced, and the laborer is 
content to receive lower wages. In Eastern Europe," 
he continues,* " the standard of living is very low, 
and the earnings of the laboring people are scanty in 
proportion. The Galicians live principally upon black 
bread, schnapps — a spirit distilled from Indian corn — 
and potatoes. The inhabitants of Bukovina and 
Moldavia live on Indian corn and schnapps, at a cost 
of from four to fivepence a day. Ninepence may be 
considered the ordinary wages." 

In Russia the food, which, he says, consists of 
" black bread and water," " costs from five to six 
shillings a month," and wages are from four to six- 
pence a day. "f In Germany day wages are from one 
shilling and twopence to one shilling and ninepence, 
and board and lodgings tenpence a day.;J: In Hungary 
wages are one shilling and threepence a day, the cost 
of living for an average family being about one shilling 
a day.§ 

McCulloch, who was a strong wages-fund advocate, 
admits that the difference in the wages in " England, 
Ireland, China, and Hindustan is the result of the 
difference in the standard of living- in those countries. " 



* Brassey's " Work and Wages," p. 89. 

f Ibid., pp. 61, 103. % Ibid., pp. 15, 16. 

§ See pp. 44-105. In a later edition Mr. Brassey has extended his 
observations on this subject, in which he says (pp. 160, 161) : " The 
cost of labor rose thirty per cent in the last ten years because of a 
rise in the cost of living ;" and on pp. 164, 165 he adds : " The wages 
in France had grown with the augmented cost of living." " The 
enhanced value of provisions had produced the same influence on 
the price of labor in Belgium as in France." 



1 66 WEALTH AND PROGRESS. 

He says :* " In England (1824), for example, the 
laborers principally subsist on wheaten bread and beef, 
in Ireland on potatoes, and in China and Hindustan 
on rice. ... In Ireland the peasantry live in miser- 
able mud-cabins, without either a window or a chim- 
ney ; while in England the cottages of the peasantry 
have all glass windows and chimneys, are well fur- 
nished, and are as much distinguished for their neat- 
ness, cleanliness, and comfort as those of the Irish for 
their filth and misery. In consequence of these differ- 
ent habits, there is an extreme difference, not in the 
rate of necessary wages merely, but in their actual or 
market rate in these countries ; so much so, that while 
the average market price of a day's labor in England 
may be taken at from tvventypence to two shillings, it 
cannot be taken at more than fivepence in Ireland and 
threepence in Hindustan." 

The wages in the building trades in London f aver- 
age about seven shillings and three halfpence (one 
dollar and seventy-one cents) a day, or rather less than 
the common laborer, and more than a dollar a day less 
than those employed in similar industries in New 
York City. 

If we examine the rate of wages paid in the differ- 
ent industries in the same localities, we shall find that 
the rate of wages paid to masons and bricklayers is 
generally higher than that paid to carpenters and 
painters, and that of carpenters and painters is con- 
siderably above that of the factory operatives. For 
example, in Fall River, Mass., the " spindle city of 



* " Principles of Political Economy," p. 181. 

f Thorold Rogers's " Work and Wages," p. 539. See also George 
Howell's " Capital and Labor ;" Leone Levi's " Wages and Earnings." 



WAGES IN DIFFERENT INDUSTRIES. 167 

America," in 1885 the wages of bricklayers and ma- 
sons — I am quoting union prices — were from three 
dollars to three dollars and fifty cents per day, and 
those of the painters and carpenters from two dollars 
to two dollars and fifty cents per day, while those of 
factory operatives were only about one dollar and forty 
cents. 

Why, it may be asked, if wages are governed by the 
cost of living, is the rate paid to masons and brick- 
layers higher than that of carpenters and painters in 
the same town, since, as a class, their standard, and, 
consequently, their cost of living, is practically the 
same. It is true that the general standard of living of 
the bricklayer and mason in the same locality is vir- 
tually the same as that of the carpenter and painter, 
and so are their aggregate wages. The former get a 
slightly higher rate of wages per day, but they are 
more exposed to the weather, and work fewer days in 
the year. Consequently, while their rate per day is 
higher, their actual income throughout the year is 
about the same. 



SECTION II. — The Income of the Family not Increased 
by the Wages of the Wife and Children. 

Although the regularity or irregularity of employ- 
ment in various occupations will explain the difference 
in the ratio of wages in the building trades, this fact, 
it may be said, is inadequate to explain the extra- 
ordinary difference between the rate of wages in the 
building trades and that paid to the factory opera- 
tives. The employment of the latter is more constant 
than that of those in any branch of the building trade. 



1 68 WEALTH AND PROGRESS. 

It is also true that in the same locality the general 
standard of living of the operative is lower than that of 
the former. But it is no less obvious that both of these 
causes are insufficient to explain the striking difference 
in their wages. It should be remembered, as we have 
repeatedly stated, that when comparing the wages and 
cost of living, we do not mean merely the rate of 
wages, when they work, and the price of board for a 
single person, but the average wages and cost of living 
of the average family in any given class or industry ; 
because if our doctrine is sound, and the income of 
the wage-receiving class is governed by their ex- 
penditures, the cost of living being given, the rate 
of wages will fall in proportion as the number of 
workers increases ; or, to be more strictly correct, as 
the amount earned by other members of the family 
increases. Consequently, other things being the same, 
in those industries where the wife and children work 
the rate of wages for the man will be the lowest. 

"The habits of the people," says Mill* "(as has 
already been so often remarked), everywhere require 
some particular scale of living, and no more, as the con- 
dition without which they will not bring up a family. 
Whether the income which maintains them in this 
condition comes from one source or from two makes 
no difference ; if there is a second source of income 
they require less from the first. . . . For the same 
reason it is found that, c ceteris paribus, those trades are 
generally the worst paid in which the wife and children 
of the artisan aid in the work. The income which the 



* " Principles of Political Economy," Book II., ch. xiv., p. 488. 
See also Report of Massachusetts Bureau of Statistics of Labor, 1876, 
p. 71. 



CHILD LABOR REDUCES MEN'S WAGES. 169 

habits of the class demand, and down to which they 
are almost sure to multiply, is made up, in those 
trades, by the earnings of the whole family, while in 
others the same income must be obtained by the labor 
of the man alone." It is this fact which explains the 
striking difference in the rate of wages paid to factory 
operatives and that of those employed in the building 
trades. Among factory operatives, all branches taken 
together, the wives and children who contribute to 
the support of the family are, on an average, as one 
and a quarter to each family, while among those em- 
ployed in the building trades the average of wives and 
children who work is only one to every four families. 
Hence, in the building trades the wages of the man 
supply about ninety-seven and one half per cent of 
the total cost of the family's living, while among the 
factory operatives the wages of the man only supply 
sixty-six per cent, or two thirds, of the cost of the 
family's living, because the other one third is furnished 
by the labor of the wife or children. Nor is this 
because the cost of living in the factory operative's 
family is greater than that of the laborer in the build- 
ing trades, for while the average family in the build- 
ing trade contains four and one half persons, that of 
the factory operative contains five and seven eighths 
persons. The total cost of living in the former is 
about fifty dollars a year more than in the latter, and 
the wages of the man in the former are nearly two 
hundred and fifty dollars a year more than those of 
the latter. 

Upon this point also ample data have been collected 
in Massachusetts for the most conclusive generaliza- 
tions. The sixth (1875) report of the Labor Bureau 

of that State furnishes a full individual statement of 
9 



170 WEALTH AND PROGRESS. 

the wages, cost of living, etc., of three hundred and 
ninety-three families employed in the different indus- 
tries. Of this number fifty-seven represent the build- 
ing trades, including bricklayers, carpenters, masons, 
painters, plasterers, ship-carpenters, and stair-builders ; 
thirty-nine are taken from the boot, shoe, and leather 
trades, which include boot and shoemakers, tanners, 
shoe-chandlers, cutters, lasters, trimmers, curriers, and 
morocco-dressers ; sixty-one are taken from the metal- 
workers, and include blacksmiths, boilermakers, cut- 
lers, engine-builders, iron-moulders, iron-roller makers, 
machinists, nailmakers, jewellers, and watchmakers ; 
seventeen are taken from the laborers in cutlery 
and iron works, machine and boiler shops, roller- 
mills, etc.; thirty-five represent factory operatives, and 
under this head are included pressers, section hands, 
spinners, and weavers ; thirty-eight represent the 
other operatives employed in the factories, under the 
head of mill laborers ; ninety-eight are taken from the 
various outdoor employments, such as laborers for 
builders, street laborers, wharf laborers, fishermen, 
etc. ; ten represent quarrymen and teamsters ; twenty- 
four are taken from shop trades, such as cabinetmak- 
ers, carriage-builders, hatters, cigarmakers, mechanics, 
stone-cutters, and whipmakers, and ten from the la- 
borers in these shop trades. 

The statement of each of these families gives the 
amount the father earns, the whole number of the 
family, the number who work, the amount earned by 
each, the total amount earned by all, how they live, 
and what it costs. The average yearly earnings of the 
father, the wife and children, and the cost of living in 
those industries are as follows : 



FAMILY SCHEDULES IN THE VARIOUS TRADES. 171 



Trades. 



Shop trades 

Metal-workers 

Building trades 

Teamsters 

Shoe and Leather 
trade 

Metal-workers' labor- 
ers 

Mill operatives 

Mill laborers 

Shop laborers 

Out-door laborers. . . . 







c 


c 














>> 




2 








£ 




■|o 




"S3r 


0! 
6 


■O-S 

« S 


n c 


u 
> «. 

« c 




En 


£ 


is 


H 


$821.40 


$752.36 


4U 


X 


$69.04 


739-30 


4'A 


% 


90.51 


829.81 


721.32 


454 


H 


73.00 


794-32 


63O.O2 


sy 2 


y 2 


105.00 


735-Q2 


540.00 


4M 


1 


209.00 


749.00 


458.O9 


sy 2 


iH 


256.08 


7I4-I7 


572.IO 


5 


1 


250.35 


822.45 


386.04 


6^: 


iy 2 


284.08 


670.12 


433-06 


1 


I T V 


232.02 


665.08 


424.12 


ty 2 


1/3 


257-93 


682.05 



o 

— bib 



$772.21 
723.OO 
740.03 
729.04 

693-I3 

697.92 
75S-Q4 
638.99 
642.08 
650.81 



From these facts, which are ample and reliable, 
three things are manifest : (1) That the aggregate 
earnings of the average family in any given class of 
wage-receivers is always proportioned to the cost of 
living in the average family in that class. (2) That in 
proportion as the wife and children contribute to the 
support of the family the wages of the father are re- 
duced. (3) That the standard of living and, conse- 
quently, the total income of the family is the lowest 
where the wife and children contribute the most 
toward its support.* 

Paradoxical as the last statement may at first appear, 
it is perfectly natural — indeed, it could not be other- 
wise ; because where the mother and children go to 



* " Thus it is seen that in neither of the cases where the man is 
assisted by his wife or children does he earn as much as other laborers. 
Also, that in the case where he is assisted by both wife and children 
he earns the least." — Report on the Statistics of Labor, 1876 p. 71. 



172 WEALTH AND PROGRESS. 

the mill it is impossible for the wants, which result 
from the refining influences of social life, to be de- 
veloped to the same extent as where the mother pre- 
sides at the home and the children attend school. 
Accordingly, if we take the shoe trades, metal-workers, 
and the building trades together, where the proportion 
of children that work is only as one to every three 
families, the average earnings of the father come 
within seven dollars and forty-two cents a year of the 
total cost of the family's living ; whereas, if the metal- 
workers' laborers, mill laborers, shop laborers, and out- 
door laborers are taken together, where the number of 
children that work are as one and one quarter to each 
family, the average earnings of the father are two 
hundred and thirty-two dollars and twelve cents a 
year less than the cost of the family's living. This 
difference is still greater when we consider the fact 
that the average total cost of living in the latter class 
is nearly one hundred dollars a year less than in the 
former. 

The same is true of women, the marked difference 
between their wages and those of men being explained 
upon the same principle. It may be urged that the 
cost of a woman's living, other things being the same, 
is as great as that of a man's. If the cost of living 
was measured by the personal expenses of the single 
individual, instead of by that of the family, as we 
have explained, this would be to some extent true ; 
but the cost of living of the workers always includes 
that of the non-workers also. Hence, in proportion 
as the non-workers are reduced are the demands upon 
the earnings of the workers lessened and their wages 
accordingly reduced. It is for this reason that the 
wages of the father, as shown above, are reduced in 



WOMEN'S WAGES, WHY LESS THAN MEN'S. 173 

proportion as the wife and children contribute to the 
support of the family. 

As the man is much more generally the head and 
chief earner of the family, a much larger number are 
dependent upon the wages of the average man than 
upon those of the average woman. Again, although 
the wants of the average woman in the same social 
environment, for amusements, travel, etc., are equal 
to those of the average man, they are generally fur- 
nished by the man, as father, friend, or lover, and 
therefore really constitute an item in the normal ex- 
penses of the man, instead of those of the woman. It 
will thus be seen that, other things being the same, 
the cost of living of the average man is much greater 
than that of the average woman, and his wages are 
correspondingly higher, as shown in following tables.* 

Wages and Cost of Living of Males. 



Counties. 



Persons 
Dependent. 



Yearly Wages. 



Cost of 
Living. 



Barnstable. . 
Berkshire. . . 

Bristol 

Dukes 

E-isex 

Franklin. . . . 
Hampden. . . 
Hampshire. . 
Middlesex . . 
Nantucket. . . 
Norfolk. ... 
Plymouth. . . 

Suffolk 

Worcester. . . 
For the State 



3-39 
313 
3.61 
2.96 
2.99 

3-03 
3.10 

3-H 
2.00 

3.18 
3.06 
3-03 
3- 04 
3.08 



$388.86 
431.00 
456-05 

359- 28 
461.65 
438.19 
563-48 
408.01 
496-58 
327-73 
447.18 

403-30 
576.19 

490.78 
482.72 



430 
479 
398 
486 
426 
569 
4 T 3 
503 
532. 
479 
423 
559 
485 



* Seventh Annual Report of the Massachusetts Bureau of Statistics 
of Labor for 1876, pp. 66-69. These tables are based upon 71,339 
schedules. 



174 WEALTH AND PROGRESS. 

Wages and Cost of Living of Females. 



Counties. 



Persons 
Dependent. 



Yearly Wages. 



Cost of 
Living. 



Barnstable.. . 
Berkshire . . . 

Bristol 

Dukes 

Essex 

Franklin 
Hampden . , . 
Hampshire. . 
Middlesex. . . 
Nantucket. . . 

Norfolk 

Plymouth . . . 

Suffolk 

Worcester. . . 
For the State 



1. 71 

2.27 
1.93 
1.50 
i-95 
1-74 
1. 71 
1.56 
1.60 
1. 00 
1. 81 
2.09 
1. 81 
1.65 
1.78 



PI33.44 
179.40 
213.02 
I49-56 
212.22 
178.74 

219-59 
192.13 
205.24 
88.67 
I48-54 
182.14 
197.87 
191.07 
198.76 



$130 40 
1S0.82 
185.98 
136-50 
203.10 
152.81 
192. 84 
169. 61 
178.82 
81.25 
190.60 
I85-39 
I84-55 
175-77 
182.86 



It will thus be seen that the number of persons sus- 
tained by the earnings of the average woman through- 
out the State is only one and seventy-eight hundredths, 
while that of those dependent upon the earnings of 
the average man is three and eight hundredths. 
Hence the yearly wages of the woman are only one 
hundred and ninety-eight dollars and seventy-six cents, 
and the cost of her living is one hundred and eighty- 
two dollars and eighty- six cents ; while the wages of 
the average man are four hundred and eighty-two 
dollars and seventy-two cents, and the cost of his 
living is four hundred and eighty-eight dollars and 
ninety-six cents. 

Although this principle has never been understood 
by economists and statesmen, it has long been un- 
consciously acted upon by practical men. It is upon 
this principle that employers import low-paid laborers 
from distant countries. The English manufacturers 
imported agricultural laborers into Lancashire, and 



DR. ENGEL S LAW OF EXPENDITURES. 175 

American capitalists import Asiatic and European la- 
borers to this country for no other reason than that they 
could live upon less and therefore work for lower wages 
than could the Lancashire and American laborers. 



SECTION III. — The Theory Further Sustained by Dr. 
Engel' s Law of Expenditures. 

Moreover, the doctrine here laid down is not only 
sustained by all industrial history, but it is also in full 
accord with the known principles of consumption as 
established by " Engel's law" of expenditure. Dr. 
Engel, the famous Prussian statistician, by exhaustive 
investigations has discovered that the incomes of the 
wages and salaried classes* are, on an average, divided 
in the various channels of expenditure as follows : 
(1) That the greater the income the smaller the rela- 
tive percentage of outlay for subsistence ; (2) that 
the percentage of outlay for clothes, rent, fuel, light, 
etc., is approximately the same, whatever the income ; 
and (3) that as the income increases in amount the 
percentage of outlay for sundries — i.e., education, lit- 
erature, art, travel, amusement, etc. — increases. f 

* All who receive stipulated incomes for service are properly 
wage-receivers. See definition of wages, pp. 73, 74. 

f These conclusions have been fully tested by extensive investiga- 
tions in Prussia, England, and America, and especially in Massachu- 
setts, where more complete data has been collected than in any other 
place in the world. Colonel Wright, after comparing the averages 
for Prussia, England, Illinois, and Massachusetts, says : " The re- 
markable harmony in the items of expenditure shown by a percentage 
of total expenditure must establish the soundness of the economic 
law propounded by Dr. Engel. The column of averages should, 
therefore, be taken as the very best results of that law, sustained by 
a wide range of data from three great countries." — Report of Mas- 
sachusetts Labor Bureau, 1885, p. 153. 



176 



WEALTH AND PROGRESS. 



It will be seen from the above that that portion of 
the general consumption which goes to satisfy the 
physical necessities is susceptible of very little in- 
crease ; that the portion which goes for clothes, rent, 
and home conditions generally, is capable of a much 
larger increase, while the possibility of enlarging the 
demand for that portion which goes to satisfy the in- 
tellectual, moral, and social wants of man is practically 
unlimited. This being true, it follows : (1) That in 
proportion as the laborer's wants are limited to his 
physical necessities will his wages be low and prac- 
tically stationary, as in Asia, Africa, and Eastern 
Europe. (2) That only in proportion as his domestic, 
social, and sesthetic wants are increased — i.e., the 
standard of living is elevated — will real wages rise. 

The truth of this principle will be more clearly seen 
by comparing the weekly wages and the number of 
days' labor devoted to procuring food and those given 
to the gratification of the higher social wants in the 
different countries, as shown in the following table :* 



Countries. 



United States 
Great Britain 

France 

Germany. . . . 

Italy 

Belgium 

Russia 

Austria 

Spain 

Scandinavia . 



Weekly 
Wages. 


Food. 


Clothes, 
Rent, and 

bundries. 


Taxes. 


$10.80 


"3 


154 


33 


7-44 


114 


154 


32 


5-04 


I20 


135 


45 


3-84 


155 


IO7 


38 


3.60 


162 


78 


60 


4.80 


133 


134 


33 


3.60 


ISO 


S3 


37 


3.84 


159 


I07 


34 


3-84 


164 


80 


56 


3.60 


147 


123 


30 



Total 
Working 
Days in 
the Year. 



300 
300 
3OO 
3OO 
300 
300 
3OO 
30O 
3OO 
300 



* This table is all taken from Mulhall's " History of Prices," 
1885, except the wages for the United States, which are taken from 
the Massachusetts Labor Bureau Report for 1884. 



WANTS A ND WA GE S IN DIFFE REN T CO UN TRIE S. 1 7 7 

From this table it will be seen that in those coun- 
tries where the largest number of days' labor a year 
is devoted to obtaining food, and the higher social 
wants are the fewest, wages are the lowest, and where 
the largest number of days' labor is given to supply 
the higher social wants, wages are the highest. Thus, 
e.g., the laborer in the United States and Great Britain 
sives one hundred and thirteen and one hundred and 
fourteen days a year respectively to the procuring of 
food, as compared with one hundred and sixty-two in 
Italy, one hundred and sixty-four in Spain, and one 
hundred and eighty in Russia ; and for the gratification 
of higher social wants the former gives one hundred 
and fifty-four days' labor a year as against seventy- 
eight in Italy, eighty in Spain, and eighty-three in 
Russia. Hence we find the wages in this country are 
ten dollars and eighty cents, and in England seven 
dollars and forty-four cents a week, as against three 
dollars and sixty cents in Italy, three dollars and 
eighty-four cents in Spain, and three dollars and sixty 
cents in Russia. Or, to state the case another way, 
the American and Englishman, after furnishing food, 
clothing, rent, and taxes — the first three of which are 
superior to those in any other country — have left to 
supply luxuries and to gratify aesthetic wants the prod- 
ucts of fourteen days a year more than the Frenchman, 
twenty-three more than the Scandinavian, forty-one 
more than the Austrian, forty-three more than the 
German, sixty eight more than the Spaniard, sixty- 
nine more than the Russian, and seventy-three more 
than the Italian. Accordingly, we see the wages of 
the American are double the European and more than 
two and a half times those of the continental average ; 



178 WEALTH AND PROGRESS. 

and those of England are nearly double the average 
of those on the continent. 

Clearly, therefore, from whatever point of view we 
consider the subject, and whatever class of data we 
examine, the evidence is ample and conclusive that 
the standard of living is the economic law of wages. 



CHAPTER VIII. 

WAGES UNDER PIECE-WORK. 

" PlECE-WORK " is one of the most delusive expres- 
sions in the whole economic vocabulary. It implies, 
and the idea is generally accepted among both la- 
borers and employers, that wages are governed by a 
different principle under " piece-work" than under 
"day-work"; that under the former the amount the 
laborer receives is determined by the quantity he pro- 
duces, while under the latter it is governed by the 
number of days he works. Although this has the ap- 
pearance of truth, it contains the very essence of error. 
" Day-work" and " piece-work" are merely different 
methods for buying and selling given quantities of 
labor, and not different principles for regulating the 
price of labor. The fact that wages are sometimes 
measured by the number of hours, and sometimes by 
the amount of labor performed or the result accom- 
plished, in no way affects the principle by which the 
daily amount received is finally determined. Eco- 
nomic prices are governed by the same law, by what- 
ever method the sale takes place. 

For the same reason that potatoes would be neither 
cheaper nor dearer because they were sold by the peck 
or by the pound are wages ultimately neither higher 
nor lower because work is done by the day or by the 
piece. If it cost three cents a yard to manufacture a 
certain grade of cotton cloth, three cents a yard is the 



I So WEALTH AND PROGRESS. 

lowest at which that cloth can be continuously sold. 
If it was sold by the pound the manufacturer could 
not afford to take any less, nor would the consumer 
consent to give any more for it on that account. If 
seven yards weigh a pound, for the same reason that 
three cents is the lowest that can be taken for a yard, 
twenty-one cents is the lowest that can be taken for a 
pound. As we have seen, what the cost of production 
is to the price of commodities, the cost of living is to 
the price of labor. Hence, for the same reason that 
under " day-work" the daily wages are governed by 
the daily wants (cost of living), under " piece-work" 
the price per " piece" is governed by the amount pro- 
duced per day.* 

The " piece-work" price always moves in an inverse 
ratio with the quantity produced. Both movements, 
however, are governed by the same law. Therefore, 
the fact that under " piece-work" the price per piece 
rises and falls in an inverse ratio with the quantity pro- 
duced, is as constant and universal as that under " day- 
work" the price per day rises and falls in a direct ratio 
with the cost of living. It is by the operation of this 
principle that the price of commodities is reduced by 
improved methods of production. If the same price 
per yard for weaving, spinning, etc., was paid with 
the power-loom and self-acting mule as with the 

* So generally is this fact recognized, that it is a common thing to 
find workmen agreeing among themselves not to do more than a cer- 
tain quantity of work, because repeated experience has taught them 
that if they do their wages will soon be proportionately reduced. 
That is why, in some trades, the unions forbid the men to produce 
more than a given quantity per day, which is so bitterly denounced as 
one of the injurious features of trades unions. This practice is 
adopted the most when new kinds of work or new machinery are intro- 
duced, in order to keep the price " per piece" as high as possible. 



DA Y- WA GES GO VERN PIECE- WORK PRICES. 1 8 1 

spinning-wheel and hand-loom, woven fabrics would 
be as dear to-day as they were a hundred years ago. 

Although this law has never been understood, it has 
always been implicitly obeyed. Consequently, where- 
ever the wages system prevails, whether the price of 
labor is fixed by royal proclamation, statute law, or 
competition, we find the rate of wages tends to conform 
to the cost of living, and the price of "piece-work" 
to the rate of wages for " day-work." This fact was 
clearly recognized by Karl Marx, who says :* " Piece 
wages are only another form of time wages, although 
it appears as though in this kind of wages the price of 
labor was determined by the quantity of product 
yielded. In fixing the piece wages the following ques- 
tions arise : What is the duration of the customary 
working day ? What quantity of goods does a laborer 
of the average industriousness and ability make in 
this time ? What are the daily wages under these cir- 
cumstances ? Suppose we find out that, on an average, 
thirty pieces of one commodity can be produced by a 
laborer in a working day of twelve hours, for which he 
receives a day's wages of one dollar and fifty cents, 
then the piece wages for one piece of this commodity 
will be five cents, for thirty pieces one dollar and fifty- 
cents. Therefore the laborer will derive no benefit 
from this form of wages, but the capitalist knows well 
how to take advantage of it." 

Accordingly, in the various statutes regulating 
wages in England from the fourteenth to the eigh- 
teenth centuries, we find the price fixed for " piece- 
work" always sustained a uniform relation to that of 
"day-work." For instance, threshing a quarter or 

* Extracts from " Capital," p. 26, Weydemeyer's translation. 



102 WEALTH AND PROGRESS. 

mowing an acre of wheat was always regarded as a 
day's work. Hence, in the thirteenth century, when 
harvest wages were threepence a day, the price of 
mowing an acre or threshing a quarter of wheat was 
threepence also. During the same period, when ar- 
tisans' wages were threepence halfpenny a day,* the 
price for a pair of sawyers to saw a hundred planks — 
which was always reckoned a day's work f — was seven- 
pence. And when " day- wages" rose after the pesti- 
lence to fivepence a day, the "piece-work" price of 
threshing and mowing rose to fivepence also,:]: and 
that of sawing one hundred planks to a shilling § 

So, when wages rose after the rise in prices in the 
sixteenth, seventeenth, and eighteenth centuries, the 
price of " piece-work" always rose correspondingly 
with that of "day-work." Thus, in 165 1 , when the 
Essex magistrates fixed the wages of common laborers 
at one shilling and twopence a day, the price of saw- 
ing one hundred planks was fixed at two shillings and 
sixpence, or one shilling and threepence for each 
sawyer. And if we compare the price paid for "piece- 
work" in the same industries in different countries or 
localities where similar methods of production are 
employed, we shall find that the rate paid will vary 
according to the difference in the cost of living. Thus, 
other things being the same, the price of " piece- 
work," like that of " day-work," is always higher in 
large cities than in small towns. The price of labor, 
whether paid by the piece or by the day, has always 
been from twenty-five to sixty per cent higher in 

* " Work and Wages," p. 180. 

\ " The sawing a hundred of planks was always estimated from 
early times as a day's work." — Rogers's " Work and Wages," p. 392. 
\ Ibid., p. 229. § Ibid., pp. 236, 237. 



PIECE-WORK PRICES HIGHER IN LARGE CITIES. 183 

London than in the country. And for the same reason 
" piece-work" as well as " day-work" prices are higher 
in New York City than in London — higher in this 
country generally than in England, and higher in Eng- 
land than on the continent. Industrial statistics, as 
we have seen, conclusively show that the yearly earn- 
ings and the cost of living of weavers, spinners, shoe- 
makers, tailors, printers, etc., who work by the piece, 
sustain as close and consistent a relation to each other 
as do those of bricklayers, carpenters, iron-workers, 
and outdoor laborers, who work by the day. 

Again, in manufacturing industries, where machinery 
is extensively used and " piece-work" is the general 
practice, although the average wages keep pace with 
the average cost of living, the price of " piece-work" 
always varies inversely with the productive capacity 
of the machinery. In the cotton industry evidence of 
this fact is constantly in view. Through the changes 
in machinery, which are mostly gradual, it sometimes 
happens that two kinds of machinery (the new and the 
old) are in use in the same factory, and very often in 
the same locality, at the same time, and accordingly 
we frequently find two different prices paid for the 
same work in the same town, and even in the same 
establishment — not a different rate of wages, but a 
different scale of prices, in order to equalize the rate of 
wages. And sometimes, in order to avoid two scales 
of prices for the same work, one will be put on " day- 
work," the rate of wages being fixed upon the average 
earnings of the other. In fact, this is the general 
practice on new machinery, until its productive capac- 
ity is correctly ascertained, after which the scale of 
prices is fixed accordingly. 

1 have, myself, seen three different prices paid for 



1 84 WEALTH AND PROGRESS. 

weaving the same cloth in the same room, all because 
it was woven in different kinds of looms. For ex- 
ample, a fifty-inch loom will not run as fast as a thirty- 
inch loom — i.e., the shuttle will not, cceteris paribus, 
pass as many times a minute across a fifty-inch space 
as it will across a thirty-inch space. While the former 
to-day will run at the rate of from one hundred and 
thirty to one hundred and fifty picks a minute, the 
latter will average from one hundred and eighty to two 
hundred picks a minute. It will thus be seen that 
when thirty-inch cloth is woven in forty or fifty-inch 
looms, the weavers on the broad looms cannot weave 
as many yards per day as those on the narrow looms ; 
hence a higher price per cut or per yard is always paid 
for weaving narrow cloth in broad than in narrow 
looms. This has been strikingly illustrated by the 
operations of sheeting manufacturers in Rhode Island 
and the print-cloth manufacturers of Fall River, Mass.* 
During the periods of depression in the cotton trade 
the print-cloth manufacturers in Fall River have sev- 
eral times stopped or run short time, in order to reduce 
the stock of goods in the market, and the sheeting 
manufacturers of Rhode Island, in order to produce 
the same effect upon the sheeting market, suspended 
the production of sheetings, and went to making print- 
cloths ;f and when they came to weave print-cloth in 
sheeting looms, notwithstanding the depressed state 
of trade and the falling state of the labor market, they 
paid three and four cents a cut more for weaving 

* The manufacturers of Fall River produce over one fifth of the total 
output of print cloth in the United States. 

f This has frequently been made the excuse for reducing wages 
instead of stopping or running short time by the Fall R.iver manufac- 
turers. 



A SLIDING SCALE OF PRICES. 185 

print-cloth than was paid by the print-cloth manufac- 
turers. In fact, this practice is so general that in 
England, in the accepted schedules of prices for weav- 
ing which are agreed upon by the trades unions and 
the employers' associations, allowance is invariably 
made for " reed space" — i.e., unoccupied space in the 
loom — which is practically a sliding scale of prices, 
and enables the weaver to earn about the same, what- 
ever kind of goods he weaves, thereby adjusting 
the " piece-work" wages to the average " day-work " 
wages or standard of living. 

If we examine the shoe trade we find the same un- 
varying law obtains ; and while the average wages of 
shoemakers have grown in a direct ratio with the 
cost of living, the price per pair for making shoes has 
grown less and less in proportion as improved ma- 
chinery has been adopted. The same is strikingly 
true in the watch and jewelry business. The price of 
piece-work for pivoting, burnishing, gilding, fitting, 
casing, etc., through the use of improved tools and 
machinery, is in many instances from fifty to seventy- 
five per cent less than it was formerly. Still, the real 
wages in these industries are not reduced, the price of 
" piece-work" being lessened only in proportion as the 
capacity to produce is increased. But while wages 
never rise in the same proportion with the increased 
power of production, the price of commodities always 
falls in that ratio ; consequently, though the nominal 
wages of watchmakers, jewellers, shoemakers, and 
weavers are not proportionately higher, the prices of 
watches, jewelry, cotton-cloth and shoes are relatively 
lower. This explains the fact that the direct and 
immediate effect of improved machinery is always 
more strikingly seen in lower prices than in higher 



1 86 WEALTH AND PROGRESS. 

wages, all of which is in strict accord with the doctrine 
that the price of labor always moves in direct ratio 
with the cost of living, and that of commodities in 
direct ratio with the cost of production. 

It will thus be observed that wherever we go or to 
whatever industry we turn our attention, we find that 
the price of labor, either under " piece-work" or 
" day-work," is ultimately governed by the same law. 
Manifestly, therefore, 

Whether laborers work by the piece or work by the day, 
The cost of their living determines their pay. 



CHAPTER IX. 

ULTIMATE ANALYSIS OF THE LAW OF WAGES. 
SECTION I. — How the Standard of Living is Determined. 

Wages being governed by the cost of living, what- 
ever affects that must indirectly affect wages. Conse- 
quently, in order to fully understand the causes which 
ultimately determine wages, it is necessary to ascertain 
what governs the cost of living. 

As already explained,* the cost of living is affected 
by two causes — viz., the price and the quantity of the 
commodities the laborer consumes. But while both 
of these affect the cost, only the latter affects the stand- 
ard of living. Consequently, though they both affect 
nominal, only the latter affects real wages. And as 
it is only the changes in real wages that produce any 
permanent effect upon the material and social well- 
being of the masses, it is only with real wages that we 
are here concerned. The real question before us, then, 
is, How is the standard of living determined ? f 

The standard of living in any community will be 
high or low, according as the social life of the masses 
is simple or complex ; or, in other words, as the num- 
ber of the daily wants of the people is large or small. 
It is lower in Asia than in Europe, lower in Europe 
than in America, lower at Five Points than on Fifth 



* Pan II., Chapter II., Sec. V. \ See Chapter II., Part II., p. 8S. 



1 88 WEALTH AND PROGRESS. 

Avenue, for the reason that the wants of the people in 
the former places are fewer and simpler than those in the 
latter. We may be told that " if wants give wealth, 
beggars would wear diamonds and paupers be million- 
aires." But such statements have more seeming than 
soundness. Indeed, it is not true, in any economic 
sense, that beggars want diamonds. If they had dia- 
monds they would not wear them, but would be sure 
to exchange them for something else. When people 
reach the 6\dsaon6.-zu anting point, they have long 
ceased to be beggars and paupers. The laborers of 
India and China do not want the conveniences and com- 
forts enjoyed by the English and American laborers, nor 
do those of the latter countries want the luxuries and 
elegancies of the wealthy classes. We do not mean to 
say that beggars would not accept diamonds, nor that 
the laboring classes in Asia, Europe, and America 
do not envy the comfort and luxury of the wealthy 
classes ; but a mere willingness to accept a thing, or 
an indifferent desire for it, or even a desire for it 
strong enough to complain at not having it, is not 
economically a want. A want, in the true sense of 
the term, is such conscious need of an object that its 
absence will cause sufficient pain to induce the effort 
and sacrifice necessary to its attainment. Until a de- 
sire has become sufficiently intense to produce more 
pain by its non-satisfaction than will result from the 
labor and sacrifice involved in satisfying it, it is not a 
want, but merely an indifferent or non-effectual desire ; 
and, therefore, it is not an economic force, because the 
need to consume is too weak to impel the effort to 
produce. 

Man has certain wants in common with the animals, 
and to that extent the same principle operates upon 



MAN'S SOCIAL WANTS. 189 

both ; and in proportion to the similarity of their wants 
are their efforts alike. The wants of the animal are 
exclusively physical, food, shelter, and self-protection 
being his only wants ; consequently, it is only for 
these necessities that he takes risks and puts forth 
efforts. 

But man is capable of other and higher wants en- 
tirely unknown to the lower animals. In fact, there 
is no conceivable limit to the extent and variety of the 
desires and wants of man's higher or social nature. In 
proportion as his wants are limited to his physical 
necessities does he remain brutal and barbarous, and 
according as the desires of his higher nature are inten- 
sified into wants does he become superior to the ani- 
mals, and rise in the scale of intellectual and moral 
development. Accordingly, we find that the quantity 
of wealth produced is always the smallest and the 
scale of civilization the lowest in those countries where 
the wants of the people are the fewest. Nor is it pos- 
sible that this should be otherwise ; for the standard 
of living can never rise above that of the wants. 
Hence, whether we will put forth any effort, or how 
much effort we will put forth, to obtain an object, will 
depend upon the intensity of our want.* 

Accordingly, other things being the same, we will 
put forth more effort to procure necessities than con- 
veniences, and more to obtain conveniences than lux- 
uries and amusements. If the wages of the sudra of 
India were suddenly increased to the level of those of 
the American laborer, that would not improve the 

* " Those nations and those classes of a nation who stand highest 
in the scale of civilization are those whose wants, as experience shows 
us, are the most numerous and whose efforts to satisfy those wants 
are the most unceasing." — Hear 11 s "Plutology," p. 20. 



190 WEALTH AND PROGRESS. 

standard of his living. Instead of consuming more, he 
would simply work less and increase his dissipation and 
wastefulness.* This explains why production cannot 
be much in advance of consumption, and why the ag- 
gregate wealth of the world can never be permanently 
much in excess of the world's aggregate wants. 



Section II. — Social Wants — How they are Determined, 

If the standard of living is governed by the wants, 
the question that next arises is, what determines the 
wants ? 

Man is a twofold being. He has a physical and a 
social nature, and, consequently, he has social as well 
as physical wants. The latter arise from his animal 
existence, and the former from his social relations. 
Therefore his physical wants, like those of the lower 
animals, a*re few, and mostly hereditary, while his social 
wants are acquired and have no conceivable limit. As 
a mere physical being, however, man has no more 
economic existence than a tiger. It is only when he 
associates with and reposes confidence in his fellow- 
man that the division of labor and exchange are pos- 
sible and economic forces can operate upon him. It 
is, therefore, with man as a social being only that 
political economy has to do. If man's only attainable 
wants are social, it follows that the causes which gov- 
ern them must be sought for in his social conditions ; 

* " If by digging the ground a whole day he [the Chinaman] can 
get what will purchase a small quantity of rice in the evening, he is 
content." — "Wealth of Nations," Book I., ch. 8, p. 55. See also 
Brassey's "Work and Wages," pp. 88, 89; Hearn's " Plutology," 
p. 20. 



THE POWER OF HABIT. 191 

and if we examine the history of man we shall find 
that his wants are few or many, and high or low, ac- 
cording to the quality of the habits and customs of 
the society in which he moves. Habit, as a little 
observation will show, not only governs our social 
wants, but it exercises an important, if not a control- 
ling, influence over our physical wants also." While 
it does not determine whether or not we shall eat, it 
does decide what and how we shall eat, the clothes we 
shall wear, and the house we shall live in — nay, more, 
the language we speak, the morals we adopt, and the 
religion we profess are all determined by the habits and 
customs of those among whom we live. Whether we are 
Christians, Mohammedans, or Buddhists ; whether we 
eat with chop-sticks or use knives and forks, and 
whether we live upon rice, wear wooden shoes and a 
cotton smock, eat black bread and dress in sheep-skins, 
or enjoy the comforts and luxuries of civilisation, all 
depends upon what country we happen to live in. 

Nor is this confined to the lower classes and most 
barbarous countries ; with a few rare exceptions, the 
style of living, the personal bearing, the company, 
and travel of the most educated and cultured classes 
in the most advanced countries are unconsciously de- 
termined by the habits and customs of the society in 
which they move. Habits are formed long before the 
power to think is acquired ; it is much easier to do 
as others do than to theorize about new methods. 

' This aggregate of beliefs and predispositions to 
believe," says Grote,f " ethical, religious, sesthetical, 
social, respecting what is true or false, probable or im- 



* Bastiat's " Economic Harmonies," p. 57. 

f " Plato and Other Companions of Socrates," Vol. I., p. 249. 



192 WEALTH AND PROGRESS. 

probable, just or unjust, holy or unholy, honorable or 
base, respectable or contemptible, pure or impure, 
beautiful or ugly, decent or indecent, obligatory to do 
or obligatory to avoid, respecting the status and rela- 
tions of each individual in the society, respecting even 
the admissible fashions of amusement and recreation 
■ — this is an established fact and condition of things, 
the real origin of which is for the most part unknown, 
but which each new member of the society is born to 
and finds subsisting. It is transmitted by tradition 
from parents to children, and is imbibed by the latter 
almost unconsciously from what they see and hear 
around, without any special season of teaching or 
special persons to teach. It becomes a part of each 
person's nature — a standing habit of mind, a fixed set 
of mental tendencies." 

In fact, habit is the strongest force in human affairs. 
It is more powerful than governments, armies, or 
the most absolute despotism. Governments may be 
changed and political institutions overturned, wars may 
be waged, the people may be plundered and even mur- 
dered with impunity, but if the most powerful mon- 
arch on the earth should attempt to suddenly reverse 
the habits and customs of his people, it would cost 
him his throne, and probably his head. 

The power of habit over the wants and conduct of 
man has long been observed by the best minds, al- 
though its relation to economic movement has never 
been understood. The influence of custom upon ne- 
cessities was observed by Adam Smith, who says :* 
" By necessaries I understand not only the com- 
modities which are indispensably necessary for the 

* " Wealth of Nations," Book V., ch. 2, p. 691. 



THE SOCIAL INFLUENCE OF CUSTOM. 193 

support of life, but whatever the custom of the country 
renders it indecent for creditable people, even of the 
lowest order, to be without. . . . Custom, in the same 
manner, has rendered leather shoes a necessary of life 
in England. The poorest creditable person of either 
sex would be ashamed to appear in public without 
them. In Scotland, custom has rendered them a 
necessary of life to the lowest order of men, but not 
to the same order of women, who may, without any 
discredit, walk about barefooted." 

' The circumstances and habits of living prevalent 
in England," says Torrens,* " have long determined 
that women in the laboring classes shall wear their 
feet and legs covered, and eat wheaten bread, with a 
portion of animal food. Now, long before the rate of 
wages could be so reduced as to compel women in this 
part of the united kingdom to go with their legs and 
feet uncovered, and to subsist upon potatoes, with per- 
haps a little milk from which the butter had been 
taken, all the laboring classes would be upon parochial 
support, and the land, in a great measure, depopu- 
lated." 

Therefore, if, as we have seen, wages are regulated 



* "Essay on the External Corn Trade," pp. 57, 58. See also 
Spencer's "Social Statics," pp. 102, 103; Draper's "Intellectual 
Development of Europe," pp. 5, 6, 7 ; Wade's " Political Economy," 
pp. 87, 88; Walker's "Wages Question," pp. 118, 119, 120; 
Rogers's " Six Centuries of Work and Wages," pp. 169, 170 ; 
Brassey's " Work and Wages," pp. 15, 16, 59, 60, 61, 70, 88, 89, 93, 
95, 96, 105, 108, 163 ; ibid., 2d ed., ch. 8, pp. 160, 161, 164, 165 ; 
Cairne's " Some Leading Principles of Political Economy," pp. 3, 10, 
362 ; McCulloch's " Principles of Political Economy," Part III., 
sec. 7, p. 181 ; J. S. Mill's " Principles of Political Economy," Vol. 
I., pp 250-25S, inclusive ; Ricardo's " Works," ch. 5, p. 52, 1881 ; 
Bastiat's " Harmonies of Political Economy," Vol, I., p. 51. 
10 



194 WEALTH AND PROGRESS. 

by the standard of living, and the standard of living is 
governed by the wants ; and if, as is generally agreed, 
wants are determined by habit, it follows that, in the 
ultimate analysis, the law of wages has its rise in the 
habits and customs of the people. The habits of man, 
which are simply his aggregate wants, constitute his 
real social character. Ultimately, then, social progress 
is neither more nor less than the change of human 
habits, or, in other words, the increase of human wants, 
which constitute the differentiation of social character. 

Here we have the true source from whence the reg- 
ulating principle in wages arises, and therefore the 
basis upon which all industrial phenomena can be sci- 
entifically investigated. Human character being the 
focal point upon which all economic and social influ- 
ences affecting progress must operate, it is manifest 
that nothing can permanently affect real wages which 
does not operate upon and through the habits and 
customs of the people.* 

Applying this test to economic phenomena, the fail- 
ure of the thousands of legislative and other artificial 
attempts to fix wages, and otherwise arbitrarily regu- 
late the production and distribution of wealth, at once 
becomes explainable. Legislation upon trade, trans- 
portation, money, mines, railroads, land, rents, profits, 
interest, wages, etc., is as powerless to permanently 
force wages up as the " Statute of Laborers," the 
" Allowance System," and the " Conspiracy Laws," 
enacted against trades unions, were in keeping them 
down. The wonder, however, is not that all such 

* '' No remedies for low wages have the smallest chance of being 
efficacious which do not operate on and through the minds and habits 
of the people." — Mill's " Principles of Political Economy" Book II., 
ch. 12, § 4, pp. 455, 456. 



TRUE TEST OF ECONOMIC SOUNDNESS. 195 

efforts should fail, but that intelligent people should 
ever have expected them to succeed.* 

Here, then, we repeat, is the true standard by which 
the economic soundness of all methods of dealing with 
industrial conditions must be estimated. It is here 
we must look for the true answer to the question,, 
' What type of social structure am I tending to pro- 
duce ?" Whether or not, or to what extent, any 
proposition or policy will affect wages, and, therefore, 
general prosperity, entirely depends upon whether or 
not, or to what extent, it will influence the wants, hab- 
its, and social character of the masses. 



Section III. — The Influences which Determine Social 
Character. 

If we take man at the time he enters the world we 
find his wants are very few, exceedingly simple, and 
exclusively animal ; and whether he is in Asia, Africa, 
Europe, or America, or whether he is the son of a slave 
or a prince of the blood, makes little real difference. 
Wherever or whatever he is, his wants at this stage of 
his existence are about the same. Food, with suffi- 
cient warmth to sustain his physical organization, com- 
prises the whole list of his requirements. Nor does 
his nationality, social status, or parentage make any 
real difference as to what that food shall be. Whether 
he is in savagery or civilization at this point, it will be 
substantially the same, and will consist of the natural 
milk of his mother, or a substitute as near like that as 
possible. 



Herbert Spencer's " Social Statics," p. 22. 



196 WEALTH AND PROGRESS. 

This being the extent of man's wants when he enters 
the world, it is manifest that all his other wants, of 
whatever nature, are acquired afterwards. The ac- 
quired wants, which we have seen constitute the dis- 
tinctive character of man, are therefore produced by 
causes which operate upon him after birth. These 
causes may be grouped under two general heads, as 
internal and external. The former includes those 
forces which arise from the inherent qualities of man's 
organization, such as temperaments and other heredi- 
tary tendencies. The latter includes all the influences 
which arise from his social environment. His wants 
and character being the result of the joint operation of 
these two sets of causes, in order to understand how 
wants can be increased, it is essential to ascertain 
which of them exercises the dominating influence in 
determining wants and social character. 

Although the subject of temperaments and heredity 
is an unsettled one, there is a conviction among scien- 
tists, writers and thinkers upon this subject that cer- 
tain qualities of organization exercise an influence in 
determining the general tendency of character. That 
is to say, other things being the same, the desires, 
wants, and character of individuals, nations, or races 
will naturally tend in a certain direction. It is not pre- 
tended that the internal power of hereditary qualities 
of organization cannot be modified or even reversed 
by the influence of external circumstances. But all 
religious, educational, and reformatory institutions 
are based upon the idea that environment is more 
powerful than heredity as a factor in determining 
the wants and habits of man. Indeed, it is only 
on the condition that the general environment re- 
mains unchanged, that it is claimed that the in- 



INTERNAL AND EXTERNAL FORCES. 197 

ternal or hereditary qualities govern the tendency 
of character. All history testifies to the fact that a 
change in the surrounding circumstances of man will 
not only produce a corresponding change in his wants 
and habits, but that it will also, though in a less degree, 
cause a similar change in the hereditary tendency of 
his organization. 

It will be observed, however, that what is thus trans- 
mitted is not wants, nor anything that constitutes 
wants, but merely the capacity for acquiring wants 
and character, if the opportunity for their acquirement 
presents itself ; or, in other words, it is simply a modi- 
fication of man's susceptibility to the influence of 
external circumstances, of which it is itself a result. 
It is clear, therefore, that it is not the internal power 
or hereditary qualities of man's organization, but the 
pressure of external forces, that exercise the controlling 
influence in determining social character.* This being 
true, it follows that man's wants will be many and 
varied, or few and simple, according to the variety and 
intensity of the social influences by which he is more 
or less constantly surrounded. 

Man is essentially a conservative as well as a social 
being, and only yields to changes when opposition be- 
comes more painful than acquiescence. It is for this 
reason that his wants and character change slowly, 
and progress is by slow degrees. 



* " Whatever, therefore, the moral and intellectual progress of man 
may be," says Buckle, " it resolves itself not into a progress of natural 
capacity, but into a progress, if I may so say, of opportunity — that is, 
an improvement in the circumstances under which that capacity after 
birth comes into play. Here, then, lies the gist of the whole matter. 
The progress is not one of internal power, but of external advantage." 
— "History of Civilization," Vol. I., ch, 3, p. 128. 



198 WEALTH AND PROGRESS. 

The child, instead of tiring of his first diet and 
wanting a change, can only by the pressure of external 
influences be induced to accept anything else, as all 
weaning experiences demonstrate. By the constant 
presentation of the new food, however, he not only 
takes it, but comes to like it, and finally prefers it to 
his previous diet. By repeated gratification, the de- 
sire thus produced for the new food naturally grows 
stronger, and soon develops into a want, which by the 
force of habit ultimately becomes an imperative neces- 
sity, the non-satisfaction of which will cause as much 
pain as did the withholding of the milk.* Thus, by 
the pressure of external forces the child learns to like 
what previous habits have taught its parents to re- 
gard as best for it. What parental authority is to 
the child environment is to the adult. The changes 
are, of course, much less painful to the adult than to 
the child, because they are generally much less abrupt. 
If, however, the average American was suddenly com- 
pelled to live upon the diet of the Hindoo, his suffer- 
ing would scarcely be less acute than that of the wean- 
ing baby, and it would last much longer, because his 
character is more firmly fixed. The same would be 
true if the Hindoo was suddenly forced to adopt the 
diet and manners of the American. In proportion as 
volition supplants arbitrary authority these changes 
naturally become less painful, because they are more 
gradual and insensible ; but they are nevertheless pro- 
duced by the same general causes. Not to eat, drink, 
and wear what is commonly accepted by those with 
whom we live or associate, or even frequently come in 
contact with, is to incur the criticism, disapprobation, 

* Carpenter's " Mental Physiology," ch. 8, pp. 351, 361. 



SOCIAL INFLUENCES IRRESISTIBLE. 199 

or even ostracism of society, which will be more or less 
severe, according to the degree in which we dissent 
from the traditional mode of living. The social nature 
of man is so strong that to be excluded from the 
society of his fellows is one of the severest punish- 
ments that can be inflicted upon him. 

Indeed, excommunication has ever been the most 
effective weapon with which society could inflict pain 
upon its individual members. In order to avoid the 
pain thus inflicted — to a large extent unconsciously — • 
man naturally tends to either adapt himself to the 
prevailing mode of living or to gravitate toward a 
social atmosphere more congenial to him. And 
upon the same principle, whether he will adopt the 
former or the latter course will depend solely upon 
which of the two changes will be the least painful 
to him. 

For the same reason that the child, through the 
pressure of parental authority, learns to like that 
which its parents habitually use, the adult, through 
the less abrupt, though no less effective, pressure of 
social environment, acquires similar likes and dislikes 
to those with whom he is immediately and most con- 
stantly surrounded, and, consequently, we always find 
him living upon the same general diet and adopting 
the same general mode of life as the family, class, or 
country to which he happens to belong. Although 
habits and customs thus form, as it were, a granite 
wall of resistance to all changes and, therefore, to all 
progress, they also form the strongest defence against 
retrogression ; for while habit will resist the advent of 
the new, it will also make a desperate struggle against 
losing the old. While it is only through the persistent 
battering: of external forces that it consents to take a 



200 WEALTH AND PROGRESS. 

step forward, it will fight "as unto death" against 
taking one backward. 

Although the hesitating influence of habit, which 
constitutes the real conservative element in human 
character, compels progress to move slowly, it is also 
the most unfailing guaranty for its permanence. What 
is thus true of our primary wants is even more strik- 
ingly true of our higher social and intellectual wants. 
By both instinct and reason we endeavor to avoid pain 
and obtain pleasure— i.e., we endeavor to move in the 
direction of the least resistance. We therefore nat- 
urally desire to obtain such things as make others 
happy and avoid those which make others miserable ; 
and the more we see and understand them the strong- 
er will be our desire to obtain or avoid one or the 
other. In proportion as the desire to obtain pos- 
session of any object strengthens, the pain arising 
from its non-satisfaction increases, until it finally be- 
comes greater than that involved in the effort neces- 
sary to satisfy it. And according to the well-estab- 
lished principle, that the power of our faculties increases 
with use, the more frequently the desire for an object 
is satisfied the stronger it becomes, and the greater 
will be the effort put forth for its gratification. Thus 
desires, by repeated satisfaction, grow into tastes, and 
tastes into absolute wants, which ultimately become 
a part of the fixed character, or " second nature." * 



* " It is a phenomenon well worthy of remark, how quickly, by 
continuous satisfaction, what was at first only a vague desire becomes 
a taste, and what was only a taste is transformed into a want, and 
even a want of the imperious kind." — Bastiaf s "Economic Har- 
monies" p. 52. " By the powerful influence of habit the desire 
becomes a taste, and the taste quickly passes into an absolute want." 
— Hearri s "Plutology," p. 14. 



HOW NEW WANTS ARE CREATED. 201 

Nor is the influence of a want confined to its own 
satisfaction. In accordance with the principle that 
the strength of a desire increases with its gratification, 
does the complete satisfaction of a want tend to give 
rise to new desires. Each new want calls forth a new 
effort for its gratification, and thereby enlarges the 
field of experience, by making more frequent and vari- 
ous social intercourse necessary, from which new de- 
sires naturally arise. 

This fact was clearly observed by Professor Ban- 
field, who says : * " The satisfaction of every lower 
want in the scale creates the desire of a higher charac- 
ter. If the higher desire existed previous to the satis- 
faction of the primary want, it becomes more intense 
when the latter is removed. The removal of a primary 
want commonly awakens the sense of more than one 
secondary privation. Thus a full supply of ordinary 
food not only excites to delicacy in eating, but awak- 
ens attention to clothing. The highest grade in the 
scale of wants, that of pleasure derived from the 
beauties of nature and art, is usually confined to men 
who are exempted from all the lower privations. Thus 
the demand for and consumption of objects of refined 
enjoyment has its lever in the facility with which the 
primary wants are satisfied." 

Nor is this all ; for it follows that, for the same rea- 
son that the satisfaction of the primary wants gives rise 
to new desires, must the new social influences with 
which one comes in contact, in the satisfaction of these 
desires, as they become transformed into wants, give 
rise to still more desires. Thus the gratification of 
present wants becomes the ever-increasing source of 

* "Organization of Industry," 1S44, 2d ed., pp. n, 12. 



202 WEALTH AND PROGRESS. 

new desires, and constantly tends to further develop- 
ment. Again, the larger the number of established 
wants, the larger will be the number and the greater 
the variety of the constantly-increasing new desires. 

The reason for this is obvious : the more numerous 
our established wants, the wider will be the field of our 
experience ; and the more frequent and varied our 
social intercourse, travel, etc., the greater will be the 
opportunity for external objects to excite our admi- 
ration and create within us new desires. And as our 
desire for and efforts to obtain any object is governed 
by our estimation of its capacity to increase our hap- 
piness, it follows that in proportion as we are ac- 
quainted with the nature and influence of external 
objects, is our power of judging of their relation to 
ourselves and their suitability to our purpose in- 
creased, and, consequently, our capacity for desire 
enlarged. And, according as our capacity for desire 
enlarges, our social, intellectual, and moral character 
is developed, and thereby the power of satisfying our 
most numerous wants is increased. It is thus mani- 
fest not only that our wants are directly produced by 
the pressure of external circumstances, but that our 
capacity for desiring and acquiring new objects is also 
determined by the extent and variety of our oppor- 
tunities for contact with social influences. In fact, 
there is no conceivable limit to the development of 
man's social wants and his ability to satisfy them, 
except those fixed by his opportunities. 

" It therefore depends," as Professor Hearn ob- 
serves,* " upon the education, in the widest sense of 

* " Plutology," pp. 19, 20. 



SOCIAL OPPORTUNITY FOR THE MASSES. 203 

that term, of each individual and upon his character as 
mainly resulting from that education, how many and 
what kind of objects, and with what persistency he de- 
sires .* . . . We know that the desires of educated 
men are more varied and more extended than those 
of persons without education. We know that the 
wages of educated men are higher and, consequently, 
the means of gratifying their desires greater than those 
of the uneducated." 

The power of social influences in shaping man's de- 
sires, wants, habits, and character is everywhere mani- 
fest. It is the recognition of this fact that makes 
us so solicitous about what our children shall see 
and hear, or where they shall go, the school they 
shall attend, the company they shall keep, the amuse- 
ments they shall have, etc. Even parents who are in 
the habit of frequenting saloons will forbid their 
children going to such places, and none but the 
most degraded will allow their children to see them 
do so. 

Indeed, the whole history of the human race is one 
continuous stream of evidence of the universal opera- 
tion of this principle. Wherever man's social oppor- 
tunities have been the most restricted, his wants, 
tastes, and desires are the most limited, and his indus- 
trial and political character has made the least prog- 
ress, and vice versa. For the same reason that the ex- 
tent of man's wants and the development of his char- 
acter is the measure of social progress, so, too, the ex- 
tent of his opportunities to increase those wants and 
develop that character is the true measure of civiliza- 

* The italics are our own. 



204 WEALTH AND PROGRESS. 

tion. Therefore, how to increase the wants, develop 
the character, and consequently advance the wages of 
the laboring classes, ultimately resolves itself into the 
question, How can the social opportunities of the masses 
be enlarged f 



PART III. 

PRINCIPLES AND METHODS OF SOCIAL REFORM. 



CHAPTER I. 

POPULAR REMEDIES FOR SOCIAL EVILS. 

SECTION I. — Industrial Progress the Cause, not the 
Consequence, of Political Freedom. 

The various efforts to promote industrial reform 
have hitherto been put forth in three general classes 
of propositions. Among the first class are the propo- 
sitions to improve industrial conditions by changing 
political institutions. All such propositions are un- 
sound, and hence must fail to accomplish the desired 
end, because they are based upon the popular but in- 
verted idea that material prosperity depends upon 
political liberty, whereas the very reverse is true. The 
history of human progress is one continuous train of 
evidence showing that, instead of political freedom 
being the cause, it has everywhere been the effect of 
industrial prosperity. 

Freedom does not consist in the mere absence of 
legal barriers, but in the actual power to go and to do. 
The poor can never ho. free in any true sense of the term. 
Whoever controls a man's living can determine his 
liberty. Freedom means independence, which noth- 



206 WEALTH AND PROGRESS. 

ing but wealth can impart. Even intelligence cannot 
give independence, except as it can give wealth. 

The reason the greatest intellects in art, science, 
poetry, politics, and literature through the ages have 
for the most part been the slaves of royalty, the nobil- 
ity, or the commercial aristocracy, is because the pov- 
erty of the former made the patronage of the latter 
indispensable to their life and labors. There is no 
power on earth that can give freedom to the poor. 
Poverty and freedom are incompatible with each 
other. 

Whatever may be, theoretically, the form of gov- 
ernment, the political freedom — real power and in- 
fluence — of the masses is always proportionate to 
their industrial prosperity and progress. Thus, the 
political influence of the masses is far greater under 
the present European monarchies than it was under 
the ancient republics. And the political influence of the 
masses is greatest to-day in those countries where the 
industrial conditions — real wages — are the highest. 
The laboring classes possess more political influence 
and freedom in England under a monarchy with higher 
wages, than they do in France under a republic with 
lower wages ; and there is still more real democracy 
with higher wages under a republic in America than 
with lower wages under a monarchy in England. 

We repeat, therefore, that the popular idea that 
pervades the literature and forms the basis of the 
statesmanship of the period, which ascribes our 
superior civilization to our democratic institutions, 
and which has just been emphasized by an interna- 
tional monument in New York harbor, representing 
liberty as enlightening the world, is radically and fun- 
damentally false. It is not true that our superior civil- 



THE ECONOMIC CONDITION OF WOMAN. 207 

ization is due to our democratic institutions ; it is 
not and never was true that liberty enlightens the 
world. On the contrary, our democratic institutions 
are the natural consequence of our industrial prosper- 
ity and superior civilization ; and liberty, like moral- 
ity, instead of enlightening the world, is the golden 
result of the world's being enlightened by the material 
and social progress of society. Were this otherwise, 
the industrial depressions which afflict the Old World 
would be unknown here. The notorious fact is that 
the frequency and severity of industrial depressions 
are as great under the democracies of France and 
America as under the monarchies of England, Ger- 
many, and Belgium. 

When the advocates of woman suffrage demand the 
ballot for her on the ground that it will enable her to 
become the industrial or economic equal of man, they 
are logically and historically putting the cart before 
the horse. There is no logical reason why woman 
should not be permitted to vote on the same condi- 
tions as man. The mistake is not in claiming for her 
the right to vote on the same conditions that it is con- 
ceded to man, but in assuming that the industrial con- 
dition of either man or woman would necessarily be 
improved by their having that right. Woman is not 
industrially and socially inferior to man because she 
does not vote, but she does not vote because of her 
industrial and social inferiority; in a word, it is be- 
cause she is poorer, and, consequently, less independent 
than man. 

Her wages and general industrial conditions are 
governed by the same economic laws as those of man. 
Her condition, therefore, can only be improved by the 
same methods that will improve his. Woman is ma- 



208 WEALTH AND PROGRESS. 

terially more dependent than man, for the simple 
reason that she has had less opportunity for social 
development than he has. Her material condition, 
like his, is the result of her industrial and social envi- 
ronment, and it can be changed only through changing 
her relations with that environment. In other words, 
the economic condition of woman, like that of man, 
can only be elevated by increasing her opportunity for 
more frequent and varied contact with new and more 
complex social influences. 

Therefore, as the social disadvantages of woman 
arise from industrial causes, all attempts to improve 
her social position by changing her political relations 
are economically unsound and practically false and 
illusive. 

The same is true of all propositions for prohibition 
and other sumptuary legislation. This class of reform- 
ers act upon the idea that drunkenness is the cause 
instead of the consequence of poverty and its degrad- 
ing influences. They talk and act as if men drink rum 
because saloons are numerous, whereas the truth is 
that saloons are numerous because men drink rum. It 
is true that drunkenness, like pestilence, tends to in- 
crease poverty, but the former, like the latter, can 
exist only in the social and sanitary atmosphere which 
poverty makes possible. Drunkenness is as much a 
social disease as cholera and small-pox are physical 
diseases. Indeed, they are both primarily due to the 
same general economic causes — poverty and its conse- 
quent degrading social and unwholesome sanitary con- 
ditions. It is true that drunkenness becomes a quality 
of human character, but character is the moral conse- 
quence — the infallible register of the ethical influence 
of social environment. Vital and criminal statistics, 



DRUNKENNESS A SOCIAL DISEASE. 209 

the world over, show that crime and disease are most 
prevalent where poverty most abounds. The rum- 
shop everywhere vies with the home. In the poor- 
est quarters of our large cities, where the social influ- 
ences and, consequently, the moral character is the 
lowest, the rumshops are the most numerous and de- 
grading. 

In the vicinity of the lowest class of tenement-houses, 
where whole families eat, sleep, and work in one or 
two rooms (of which there are thousands in New 
York City alone), the rumshops are unattractive, ill- 
appointed, and often filthy, their attendants are un- 
tidy, coarse, insolent, and not infrequently brutal in 
their bearing. But as we approach the localities 
where the material conditions of the bulk of the com- 
munity are higher and their homes and social sur- 
roundings are better, we find the saloons become fewer 
in number and superior in quality. They become 
cleaner, more commodious, and better appointed ; their 
attendants are correspondingly neater, more intelli- 
gent and attractive personally, and more courteous and 
gentlemanly in their attentions and bearing. When 
we reach the " Murray Hills," the " Back Bays," and 
the " West Ends," where the average material and 
social conditions are the highest, the saloon fails to 
compete with the general comforts and refinements of 
the home, and therefore it practically disappears. 

In the lowest districts where wages are the smallest, 
the homes the poorest, and the rumshops the vil- 
est, the man who gets drunk and abuses his family, or 
even is sent to the house of correction occasionally, 
does not lose his social reputation and character. He 
may be referred to as "a little unfortunate," but it in 
no way affects his social standing in the class to which 



210 WEALTH AND PROGRESS. 

he belongs. Indeed, he would be more liable to be 
ostracized in such a social atmosphere if he did not 
get drunk occasionally. If we go into districts where 
the wages, homes, and social surroundings are of a 
higher grade and the rumshop is better, we find drunk- 
enness less general. 

A man there may, perhaps, be excused for getting 
drunk occasionally, but if he does it habitually, or dis- 
turbs the peace, or abuses his family, and if he should 
be arrested, he would lose caste with his neighbors, and 
soon become socially ostracized. And in the localities 
where material and social conditions are still better, 
and the general culture and refinement is greater, 
we find this social boycott automatically imposed on 
much smaller provocation. Here drinking will neces- 
sarily be conducted more cautiously ; a man will take 
great pains to avoid being regarded as a tippler. 
If, through over-indulgence, he should fall into the 
hands of an officer of the law, great efforts will be 
made, perhaps bribes paid — as is commonly the case — 
to keep it out of the public prints, or from otherwise 
becoming known, in order to escape the loss of repu- 
tation and the social boycott necessarily consequent 
upon such conduct. And in the localities where the 
superior material conditions and social refinement have 
practically eliminated the grogshop as an institution, 
this social boycott on drunkenness and its accompani- 
ments becomes still more summary and absolute in its 
influence. 

It may be said that the rich have the wine in their 
cellars. This is true, but when, through the refining 
influences of superior material and social conditions, 
the wine is transferred from the saloon to the cellar, 
because that institution is incompatible with the pre- 



THE SALOON RECEDES AS THE HOME IMPRO FES. 2 1 r 

vailing culture and social customs, drunkenness is 
surely in its last stages of elimination. When the 
wine has reached the cellar it is directly under the 
influence of the strongest social power in existence 
against its abuse or indiscriminate use. The presence 
of the family, especially the children, and the refine- 
ment of the home influences in such a social atmos- 
phere, all directly tend to prevent its common or ex- 
cessive use. It would be brought out only on special 
occasions, and dealt out with care, so that under such 
conditions drunkenness must necessarily become al- 
most an impossibility. 

In fact, when the material and social conditions of 
the masses have reached the point where the comforts 
and refinements of the average laborer's home are 
more attractive than those of the saloon, drunkenness 
will cease to pollute the moral atmosphere of the 
community. 

Drunkenness, like all other social diseases, has its 
tap-root in economic conditions. Consequently, any 
attempt to abolish drunkenness by sumptuary legisla- 
tion which does not operate upon and through the 
industrial and social conditions of the masses is neces- 
sarily unsound and impracticable. 



SECTION II. — Rent, Profit, Tax, and Money Reforms. 

Among the second class of propositions for promot- 
ing the industrial reformation of society are those 
which propose to improve the economic condition of 
the laboring classes by the arbitrary abolition or manip- 
ulation of rent, profits, interest, taxes, etc. These 
propositions are all based upon the very erroneous 



212 WEALTH AND PROGRESS. 

assumption that if rent, profit, interest, and taxes 
were arbitrarily reduced, wages would thereby be cor- 
respondingly increased, which is a fundamental mis- 
take. If these were all abolished to-morrow, there 
is no economic force by which the wealth thus saved 
would, for that reason, go to the laborer. 

This error arises from an entire misconception of the 
economic law of wages. It is commonly assumed that 
wages are determined by rent, profits, etc., whereas, 
as we have elsewhere shown, the reverse is true, and 
instead of these determining wages, they are ultimately 
determined by wages — i.e., by the economic ability of 
the masses to consume wealth, without which neither 
rent, profit, nor interest would be possible. Wages 
not being governed by profit and rent, it is futile to 
attempt to increase the former by any direct or arbi- 
trary manipulation of the latter. Wages can only be 
permanently increased by dealing with the causes that 
govern wages, which, as already shown, are entirely 
outside of profits, rent, interest, and taxes. 

Not that the question of taxation is of no impor- 
tance. It is, of course, an important function of gov- 
ernment to see to it that the revenues necessary for 
the administration of public affairs should be as equi- 
tably levied, as economically collected, and as wisely 
disbursed as possible. And it is for the best interest 
of the community that the methods which will accom- 
plish this with the least amount of bureaucracy, favor- 
itism, and waste should be adopted. But all this 
merely relates to the details of administration, to the 
wisdom or unwisdom of disposing of a very small por- 
tion of the wealth at present produced. It exercises 
no appreciable influence upon the total amount of 
wealth produced, nor upon the income of the laboring 



TRUE BASIS OF PUBLIC INTEGRITY. 213 

classes, for the simple reason that it does not affect 
the causes which influence the production of wealth 
and the general rate of wages. 

While a careful collection and an honest and wise 
disbursement of public funds is a marked feature of 
good government, the wise or unwise use of a few 
millions of dollars is of no sort of importance as com- 
pared with promoting the social influences which tend 
to increase the aggregate production of wealth and the 
daily income of the masses. Indeed, the promotion 
of the latter is the only sure way of securing the former. 
Public integrity and the wise administration of gov- 
ernment can only be permanently secured by elevating 
the intelligence and social character of the masses, 
upon which the character of all government finally de- 
pends. No government can continuously dissipate 
the revenues or abuse the trust of an intelligent, well- 
informed people, and no power can prevent profligate 
waste, public corruption, and maladministration in the 
public affairs of a poor and ignorant people. 

The same is essentially true of money. It is one of 
the functions of government to furnish a medium by 
which commodities can be easily exchanged. It is 
quite important that this money should be made of a 
material and issued in such form and quantities as 
shall best suit the industrial and social convenience of 
the people. This should be done on a scientific basis, 
so that a sudden change in the volume and value of 
the currency, to any considerable extent, could never 
occur. Beyond this there is no real economic im- 
portance to be attached to the money question. Any 
violent disturbance of prices, which a sudden change 
in the currency always involves, is invariably inimical 
to industrial interests. That it is the duty of good 



214 WEALTH AND PROGRESS. 

government to devise a scientific financial system by 
which an unvarying medium of exchange be continu- 
ously issued, I freely admit, but if such a perfect sys- 
tem of finance were devised and universally adopted 
to-morrow, it could not possibly produce any impor- 
tant effect upon the general prosperity of the commu- 
nity, or upon the economic condition of the laboring 
classes. No industrial or social improvement could 
be produced by any change in the quantity or quality 
of the currency, for the obvious reason that money, as 
such, having no other function than a medium of ex- 
change, sustains no important economic relation to 
the social forces which determine the amount of wealth 
produced or the amount of the laborer's income. 

In fact, so far as the inherent economic and social 
influence of money is concerned, wages might forever 
remain at ten cents a day with the most perfect cur- 
rency the world is capable of devising. Nothing can 
permanently affect wages that does not influence the 
social character of the laborer, which no system of 
nuance, as such, however perfect it may be, is capable 
of doincr. * 



SECTION III. — The Inadequacy of Socialistic Methods. 

The third class of measures which are proposed for 
the industrial improvement of society are those of a 
socialistic character, such as state socialism, coloniza- 
tion, co-operation, etc. These propositions are more 
plausible in theory, but are as futile in practice as 
those just considered. The fundamental error in these 

* For a mere thorough discussion of the money question, the reader 
is referred to the next volume. 



SOCIALISTIC METHODS OF REFORM. 215 

schemes is that they are attempts to anticipate instead 
of to promote social evolution. 

They are proposals for the remodelling of society 
on a high plane of intelligence and equity, without 
the first conditions upon which such a society can be 
possible. Like the effort to play Hamlet with Hamlet 
left out, they are conspicuous for the absence of the 
essential conditions upon which their success depends. 
All propositions of this nature are based upon the idea 
that not only the political government, but also the 
industrial and commercial enterprises should become 
the collective property and be under the control of the 
collective management of the community. 

If the advocates of these schemes would content 
themselves with pointing out the fact that such is the 
goal toward which all social development is tending, 
and were willing to help to promote its natural move- 
ment in that direction, there could be little ground for 
taking exception to their position. Whether their 
conclusions as to the goal of human progress are cor- 
rect or not, if the movement of society is accelerated 
along the line of its natural development, it will surely 
move in the direction of its true end, whether that be 
the one they have pointed to or not. The important 
function of the social philosopher is not to discover 
the extreme goal or final terminus of human progress, 
nor to decide what will be the precise social relations 
in the highest possible state of social development. 
This, at best, must necessarily involve considerable 
doubtful conjecture. The function of the true philos- 
opher is to ascertain the laws by which the move- 
ment of society from the simple to the complex is 
governed. This being done, if we put ourselves in 
correct relation with those laws, whether that goal is 



216 WEALTH AND PROGRESS. 

in accordance with our more or less fanciful specula- 
tions or not, we shall be sure to move toward the 
highest possible social eminence and perfection. 

But this is precisely what the advocates of co-opera- 
tion and state socialism do not do. They first satisfy 
themselves as to what an ideal state of society should 
and would be, and then instead of helping to promote 
industrial and social progress toward the point where 
such a state of society could be possible, they attempt 
to anticipate all necessary growth and preparation, and 
establish what they regard as a high state of society 
upon low industrial and social conditions. In other 
words, they want to arbitrarily inaugurate a high state 
of civilization upon the conditions which will barely 
sustain a modified state of barbarism ; than which 
nothing can be more fallacious and impracticable. 

A proposition for introducing an important change 
into social institutions is just as unsound, for all prac- 
tical purposes, if it is incorrect in relation to time, as 
if it were incorrect in relation to principle. The first 
and indispensable condition to the successful establish- 
ment of an industrial and social democracy is intelli- 
gence and character, not only in the leaders, but in 
all, or nearly all, who participate in it, in order to un- 
derstand and appreciate its principles, and harmo- 
niously sustain its government in accordance therewith. 
If intelligence and character is not general among its 
members, the management and control of affairs must 
naturally soon fall into the hands of the most capable 
and successful members of the community. And 
these, in the very nature of things, will become the 
governing and, therefore, the fortunate and wealthy 
classes. 

That this condition is conspicuously absent as yet, 



SOCIALISTIC INDUSTRY IMPRACTICABLE. 2IJ 

not merely in the barbarous but in the most civilized 
countries in the world, is too obvious to need stating. 
Not only do the great mass of the laboring classes 
lack the material conditions and intellectual and social 
character necessary to sustain a truly industrial co- 
operative commonwealth, but no considerable portion 
of them are equal to any such an undertaking. This 
is demonstrated by the almost universal failure of in- 
dustrial co-operative undertakings. It should also be 
remembered that these experiments have been under- 
taken by the most intelligent and enthusiastic portions 
of the community. 

If we examine the history of co-operative or social- 
istic enterprises we shall find that their failure or suc- 
cess has been proportionate to the simplicity or com- 
plexity of their undertaking. Thus, even in Eng- 
land, where co-operative enterprises have reached their 
highest success, all attempts to establish a purely 
democratic form of industrial, not to say social, co- 
operation have completely failed. There is scarcely a 
single industrial enterprise in Europe or this country 
that was started on the democratic plan which, in less 
than twenty years, and generally in a quarter of that 
time, has not been forced to assume the aristocratic — ■ 
" property qualification" — mode of government, or go 
out of existence. In other words, they all failed as 
democratic industrial undertakings, and either became 
joint-stock companies or disappeared altogether. 

Another and less democratic and less complex form 
of productive co-operation, known as " profit-sharing," 
has been more widely adopted, and has been somewhat 
more successful. Thatis to say, the experiments have 
lasted longer in most cases where rich employers, while 
keeping the management of the business in their own 
ii 



218 WEALTH AND PROGRESS. 

hands, have divided a portion of the profits among 
their employes, than in cases of purely democratic co- 
operation, where the laborers shared equally in the 
control of the business as well as in the profits accru- 
ing from it. But while the experiments of profit- 
sharing have been more general and continuous than 
those of industrial co-operation, pure and simple, they 
also have, with a few exceptions, proved failures. The 
few successes like Leclaire, in Paris, and Godin's Fam- 
ilistere, at Guise, stand almost alone amid the numer- 
ous failures along this line, not only on the continent, 
but in England and this country. 

Furthermore, the success of these few, as the history 
and methods of the enterprises clearly show, is mainly 
due to the character and personnel of the individual 
capitalists undertaking them. 

Again, profit-sharing is impracticable as a general 
scheme, because it is only the most successful or ad- 
vantageously situated employers * who have any con- 
siderable amount of profits to divide. A large propor- 
tion of employers, instead of having any large amount 
to divide among the laborers as profits, as is generally 
supposed, are struggling on the verge of insolvency. 
If, by any force of law or custom, profit-sharing should 
become general, so that all employers were virtually 
compelled to adopt it, one of two things would neces- 
sarily follow — vis., either the general rate of stipulated 
wages would fall or the price of products would rise in 
the same ratio, and the actual income of the laborer 
would, in the long run, be practically the same. In- 



* Sueh, e.g., as those who have large capital, most improved ma- 
chinery, situated near to the general market, or have some other 
monopolistic advantage over the bulk of those engaged in the business. 



INADEQUACY OF PROFIT-SHARING. 219 

deed, it is impossible that it should be otherwise, for 
the obvious reason that the capitalist can only divide 
profits when he has profits to divide, which a large 
portion of employers have not. 

Profits can be increased only in one of two ways : 
either by raising prices or reducing the cost of pro- 
duction. A rise of prices would be a virtual reduction 
of wages, and any division of profits by such means 
would be simply " taking away with one hand in order 
to give with the other." The cost of production can 
only be permanently reduced by the use of large cap- 
itals or labor-saving appliances, which implies a larger 
aggregate production, and, consequently, an increase 
in the general consumption of wealth. And this, as 
we have fully explained elsewhere,* is governed by the 
standard of living or social character of the masses, 
which no amount of profit-sharing can materially affect. 
In fact, whatever would enable the employer to give 
the laborer a bonus in the form of profits would enable 
him to raise wages, and, for the same reason, what- 
ever would make it necessary to reduce wages would 
render it impossible to divide profits. 

It is a law in economics, which all industrial history 
proves, that the income of the laborer is proportionate 
to his social wants ; and if it is derived from one or 
from several sources it will ultimately be substantially 
the same. Accordingly, when the English laborer re- 
ceived parish allowance in addition to his wages, his 
income from both sources was no greater than from 
wages alone, after the former was abolished. And so 
it is to-day. Where the laborers have perquisites, 
such as the privilege to keep a cow, small allotments 



* Chapter II., Part I. 



220 WEALTH AND PROGRESS. 

of land, etc., in addition to their wages, the rate of 
wages is correspondingly lower than where their whole 
income consists of money. It is notorious that in 
those industries where the income of the laborer's 
family includes the earnings of the wife or children, 
the wages of the man are, on the average, proportion- 
ately lower than in those where the sustenance of the 
family depends entirely upon his wages. * For the 
same reason, if the income of the laborer was made up 
of wages and profits, ultimately the two would be no 
more than wages alone. 

If we turn from productive to what is commonly 
called distributive co-operation, where the business is 
simpler and more direct, where the industrial subtle- 
ties and commercial fibres are less intricate and com- 
plex, where the business is all done with the members, 
and, therefore, a little bad judgment is less likely to 
prove disastrous, a much larger per cent of successes 
is to be found. And among these, much the largest 
portion of successful undertakings is to be found in 
the retail grocery trade, where the variation of prices, 
qualities, and styles of goods is at the minimum, and, 
consequently, where the smallest possible amount of 
business skill, sagacity and shrewd financiering is 
necessary. Again, if we examine the associations of the 
laboring classes, such as trades unions, where still less 
of these qualities of character are required, and where 
the whole purpose of the association is centred upon 
one or two simple, though important, objects, such as 

* " For the same reason it is found that, cateris paribus, those 
trades are generally the worst paid in which the wife and children of 
the artisan aid in the work." — Mill's "Principles of Political Econ- 
omy,'" Book II., ch. 14, §4, p. 4S8. See also Chapter VII., Part II., 
pp. 167-175. 



DISTRIBUTIVE CO-OPERATION. 221 

watching for the timely moment to demand an in- 
crease of wages, a reduction of the hours of labor, or 
other direct improvements in their industrial condi- 
tions, the undertakings are far more numerous and the 
percentage of successes is much greater. All experi- 
ence thus shows that industrial co-operation has failed 
just in proportion as the higher qualities of character 
became necessary to its success 

It may be urged that this is no argument against 
co-operation, per se, because all the failures are due to 
the inexperience and incapacity of those undertaking 
them, and not to the principle itself. And the fact 
that it is feasible in a few cases proves that it could be 
a universal success, if the people were sufficiently 
intelligent to carry it out. This may all be true, but 
its universal failure conclusively demonstrates that 
this indispensable condition is conspicuously wanting 
among the great mass of the laboring classes to-day. 
Therefore, co-operation, whatever would be its merits 
in a more highly developed state of society, as a means 
of abolishing the evils arising from our present indus- 
trial and social conditions, must be practically inoper- 
ative and hopelessly inadequate. 

'Yes," replies the advocate of state socialism, 
" but that does not apply to our proposition. What 
we ask for is not that the most intelligent and capable 
members of the community should band themselves 
together in order to improve their own condition, re- 
gardless of that of those below them. That is only 
what capitalistic corporations are doing, which tends 
to increase rather than lessen the burdens of the 
poorest and weakest classes. What we want," he 
adds, " is that all industrial co-operation shall be 
undertaken by the state for the whole people. All the 



22 2 WEALTH AND PROGRESS. 

means of production, in the phrase of Marx, should 
be in the hands of the government." And, as a 
sample of the marvellous powers of state socialism, 
we are referred to the phenomenal success of the gov- 
ernmental management of the Post-Office. 

Well, let us see. In the first place, the Post-Office 
Department has not been a financial success — that is 
to say, it has not been self-sustaining, and its deficien- 
cies have had to be made up from time to time out of 
the general taxes. If any private enterprise was in 
that condition, instead of being called a great success, 
it would be regarded as bankrupt. But, it may be 
asked, could letters be sent across the continent for 
two cents by private enterprise ? Certainly ! Why 
not ? What does the government do toward making 
it possible to send a letter three thousand miles for 
two cents ? Nothing, positively nothing ! All the 
government does in the mail service is to collect, as- 
sort, stamp, and bag the outgoing and deliver the in- 
coming letters, give out and receive money-orders, and 
render a correct account of the business done. All of 
this is purely clerical work, which, after being once 
systematized, is simple and even monotonous. There 
is nothing in it which calls for exceptional skill or 
rare business capacity, such as is required to success- 
fully manage large business enterprises, with their 
close competition and ever-varying subtleties and 
complications, where a slight error of judgment might 
involve a loss of thousands of dollars, and perhaps 
cause the ruin of many persons. When the letter-bags 
leave the door of the Post-Office to start on their flying 
trip across the continent, they enter into the hands of 
private enterprise. It is the great railroads and steam- 
ship companies that make it possible for the letter to 



THE POST-OFFICE AS A PUBLIC ENTERPRISE. 223 

go three thousand miles for two cents. The cheap 
methods of travel and transportation which carry the 
mails are in no way due to state influence, but en- 
tirely to private enterprise. In fact, they are the nat- 
ural outcome of the industrial and social progress of 
the community. 

Thus it is seen that all the important work in the 
cheap and rapid transmission of the mails is due to the 
social development of the people under the impetus 
and control of private enterprise ; and that portion of 
the mail service which is entirely in the hands of the 
state, unlike all private enterprises of a similar char- 
acter, such as express companies, etc., is a complete 
monopoly, being entirely free from competition, and 
almost free from responsibility ; at least so far as its 
relation to the individual is concerned. If I send a 
package through the United States mail, and it is 
lost, I have no redress, whereas if I send it by any ex- 
press company they are responsible to me for the full 
value I set upon it when it is delivered to them. 
And where the railroads are owned or the tariffs con- 
trolled by the state, as on the continent, they are 
more expensive, less efficient, and the rates of trans- 
portation are higher and the wages of labor are much 
lower than in this country, where they are all managed 
by private enterprise. 

Manifestly, then, there is nothing connected with the 
management of the Post-Office or in the experience 
of governmental control of railroads to sustain the 
claim that state management of industries, especially 
in the more complex branches of production, is neces- 
sarily superior or even equal to those of private enter- 
prise. Indeed, such a supposition is illogical and con- 
trary to all known facts. If the most select and en- 



224 WEALTH AND PROGRESS. 

lightened members of the community lack the neces- 
sary intelligence to sustain co-operative or socialistic 
enterprises, except of the most simple character, 
what right have we to assume that the whole com- 
munity, with a much lower average intelligence, could 
more successfully manage the most complex and diffi- 
cult economic undertakings ? It is simply absurd. 

To this it may be replied that if the industries of the 
country were in the hands of the state, the same class 
of persons would have charge of them as now, the 
only difference being that they would then be man- 
agers for the people instead of their being owners of 
the plant, and managers for themselves, as at present. 
But there is no reason to believe, and every reason to 
disbelieve, that the same class of business capacity and 
enterprise which now prevails in economic affairs 
would be put in charge under state socialism to-day. 
In fact, with the present state of average intelligence, 
such a result would be practically impossible. De- 
mocracy seldom elects the very best capacity to any 
office ; nor, in the nature of things, can that be ex- 
pected. Socialism, which means the broadest kind of 
democracy, must necessarily be governed by represen- 
tation through popular election and not by limited or 
qualified selection. By this means public officers can- 
not be drawn from the most capable nor from the 
most incapable classes. The laborers would not vote 
for a Vanderbilt, Gould, or a Field for railroad man- 
agers, although they are the most competent men on 
the continent for the business ; nor could an east-side 
laborer obtain the votes of Fifth Avenue for any pub- 
lic position. In order to obtain the popular vote in a 
broad democracy, the representative must reflect in 
the main the ideas, capacity, and character of the great 



PUBLIC OFFICIALS SELDOM EXPERTS. 225 

mean average of the community, which will always be 
better than the poorest, and considerably inferior to 
the best. 

This explains why our legislative and executive 
offices, with a few rare exceptions, are always filled by 
men of the most commonplace type, the highest order 
of executive and enterprising capacity being devoted 
to trade and industry. Consequently, we find public 
business is conducted with notoriously less economy 
and ability than are private enterprises. 

Thus, from whatever point of view we consider in- 
dustrial co-operation or state socialism, we find them 
wholly inadequate as a means of reforming the present 
industrial and social conditions. They must neces- 
sarily fail as a means toward establishing an ideal social 
state, because they are the very ideal state (so claimed) 
which we need the means to establish. It is because 
" industrial co-operation," " association," or " social- 
ism" implies a high social state that theyrequire a 
high grade of intellectual and social development in 
the people in order to sustain them. It is this very 
weakness and incapacity among the laboring classes, 
arising from their poverty and its social disadvantage, 
so fatal to the establishment of " industrial associa- 
tion," which makes industrial reformation necessary. 
Therefore, while " mutual association" or " co-opera- 
tion" may prove to be the most equitable, convenient, 
and harmonious industrial system to adopt when suffi- 
cient progress has been made to sustain it, manifestly 
it can never be successfully adopted as a means to 
that end. 

There is another objection to this class of schemes 
which is fatal to them as a means of reforming society, 
and it applies with equal force to profit-sharing, land 



226 WEALTH AND PROGRESS. 

nationalization, co-operation, and all industrial phases 
of socialism, as well as to efforts to arbitrarily manip- 
ulate interest, profits, rents, wages, etc. It is that 
they are efforts to enrich one class at the expense of 
another, which is wholly uneconomic. Nothing can 
permanently improve the economic condition of one 
class in any industrial community which does not tend 
to improve that of all classes. No change, however 
equitable, in the distribution of the wealth now being 
daily produced could make any important difference 
in the well-being of the masses. There is nothing 
more delusive than the rose-colored dreams about the 
social advantages that would result from transferring 
the profits, by means of profit-sharing, co-operation, 
etc., from the capitalist to the laborer. The advo- 
cates of these propositions, which have included some 
of the most careful economists, both in England and 
on the continent, as well as in this country, appear to 
be unwittingly captivated by the delusive coloring of 
their own picture. This delusion arises partly from 
the mistake of estimating the amount capable of being 
divided upon the basis of the profits of the most suc- 
cessful enterprises, which constitute but a very small 
per cent of the employing class. It would be just as 
correct to estimate the profits of all newspaper enter- 
prises on the basis of the earnings of the New York 
" Herald," " World," and "Sun," or all railroads upon 
that of those of Vanderbilt and Gould ; and it is partly 
due to the fact of viewing the amount that can be thus 
divided in the aggregate, instead of in the weekly 
amount it would give to each laborer. 

We have occasionally heard of ten, twenty, and 
even fifty thousand dollars being divided among the 
laborers by some exceptionally fortunate experiments 



THE SOUND SENSE OF THE TRADES UNIONISTS. 227 

at profit-sharing and other forms of co-operation. 
These amounts have an imposing appearance to the 
abstract theorist, who sees them only in the aggregate. 
It has no such rose-colored seeming to the laborer, 
however. He is interested not so much in that large- 
sounding aggregate as he is in the portion of it which 
will reach him, and that, from such sources, is always 
very small, seldom amounting to more than a few 
cents a week. Suppose it should be announced that, 
in 1887, the employing classes in this country would 
divide one hundred million dollars among the laborers. 
Imposing as that amount may seem in the aggregate, 
and important as it might be in reducing the cost of 
commodities if employed as capital in improved meth- 
ods of production, it would be of very little impor- 
tance to the laborer, as it would give him less than 
twenty cents a week, or about three cents a day, equal 
only to a rise of about two per cent in wages. And 
because the laborer does not evince a disposition to 
abandon his trades union and forego all efforts to in- 
crease his wages, and otherwise improve his condition, 
for the privilege of participating in the present profits 
at the rate of two or three cents a day, he is berated 
as an economic blockhead. Even Professor Jevons, 
one of England's most scientific economists, took this 
view. In his chapter on profit-sharing* he cites the ex- 
periment of the Briggs Brothers, which was one of the 
most successful of its kind in England. He shows 
that the laborers received in profits from two to five 
pounds a year, according to their wages, and still they 
finally went on strike, and broke up that beautiful ar- 
rangement^?) If we look at the case from the laborer's 

* " Problems of Social Reform." 



228 WEALTH AND PROGRESS. 

standpoint, which is the true economic view, it ap- 
pears quite different. While a very few of the highest- 
paid employes received five pounds (twenty-four dol- 
lars), the bulk of them did not get more than three 
pounds (fourteen dollars and forty cents). But sup- 
pose they received four pounds — which they seldom 
did, more frequently getting less than half that 
amount — that would be less than six cents a day. 
Thus while the distribution of that amount to each 
employe may be regarded as an exceptionally gen- 
erous act on the part of the Briggs Brothers, eco- 
nomically it was a matter of small moment to the 
laborer, being about one-third less than a permanent 
advance of ten per cent in his wages would have given 
him. The same is true of the nationalization of the 
land.* 

It is not surprising, therefore, that the laborers, who, 
though they have never entertained very sound theories 
on economics, have always displayed a much greater 
degree of practical common-sense in regard to indus- 
trial affairs than most social theorists, should prefer to 
rely upon the traditional means of bringing about an 
increase in their wages. The failure of this and hun- 
dreds of other similar experiments are not due to a 
lack of mutual good feeling between the employer and 
employed, as is so often affirmed, nor lack of gener- 
osity and sacrifice on the part of the capitalist, but it 
is due to the economic impossibility of attaining the 
desired end by such means. Indeed, the material 
condition of the masses can never be appreciably im- 
proved by any possible amount of generosity or sacri- 
fice on the part of the few. The poverty of the laborer 
is not due to the inequitable distribution of the pres- 
* See Introduction, p. 5. 



MORE WEALTH PER CAPITA THE ONLY REMEDY. 229 

ent wealth, but to the fact that the aggregate wealth 
produced is too small. In fact, it is a universal law 
in economics,* that the greater the aggregate amount 
of wealth produced per capita in any community, the 
more equitable its distribution. 

It is equally true that there are no economic means 
by which the material condition of the masses can be 
permanently improved which do not tend to increase 
the aggregate production of wealth per capita. And 
this, as we have repeatedly shown, can only be brought 
about by increasing the influences that develop the 
social wants and economic demands of the masses. 
The first and indispensable condition for the perma- 
nent development of character is increased social op- 
portunities, which is precisely what the class of prop- 
ositions we have been considering does not tend to 
furnish. 

* See chapter on Profit, Vol. II. 



CHAPTER II. 

HOW TO ENLARGE THE SOCIAL OPPORTUNITIES OF 

THE MASSES. 

In the foregoing chapters we have seen that indus- 
trial, social, and political progress primarily depends 
upon the social character of the laboring classes. 
They constitute what Lasselle tritely termed " the 
fourth estate," whose well-being underlies and in- 
cludes that of the whole community. It is upon their 
consumption, as determined by their habits and char- 
acter, that all economic movement in the production 
and distribution of wealth depends ; and it is by their 
character, as mainly resulting from their social oppor- 
tunities, that the progress of civilization is ultimately 
determined. 

The question, therefore, for the science of social 
economics to solve, is not how to abolish rent, how to 
reduce profit, prohibit interest, regulate the currency, 
diminish taxation, manipulate tariffs, control liquor 
traffic, etc., but how it is to enlarge the social oppor- 
tunities of the masses. Let this question be once 
clearly settled, and all such minor issues, which are 
more the consequence than the cause of the laborer's 
social condition, will as surely be economically solved 
as that savagery recedes before advancing civilization. 

But before a satisfactory answer to the above ques- 
tion can be given, it is necessary to understand what 
constitutes social opportunity. In the sense that the 



SOCIAL OPPORTUNITY DEFINED. 231 

expression is here used, opportunity, like freedom, 
does not consist of the mere absence of legal or arbi- 
trary limitations. A man is not free to go and to do, 
simply because statute law does not forbid him, nor 
even by virtue of its expressed permission to do so. 
The man whose livelihood depends upon the will of 
another has no more freedom than if he were bound 
by statutory enactment. Whoever controls a man's 
living can control his liberty. To be restricted, by 
whatever means, to choosing between obedience to 
the will of another and starvation, is not freedom. 
The worst form of chattel slavery that ever existed 
could not prohibit the slave from choosing between 
obedience and death. The freedom to do implies not 
only the right, but also the power to do. To simply 
remove imposed restrictions, to make access to certain 
places and things legally possible, is not necessarily 
creating opportunity. In India both law and caste 
forbid social intercourse between the sudras and Brah- 
mins, but the absence of these conditions in China 
does not constitute an opportunity for social inter- 
course in that country. The fact that there are no 
class distinctions in our educational institutions does 
not constitute an opportunity for the masses to receive 
a college education. It would be just as correct to 
say that every citizen has an opportunity to be Presi- 
dent of the United States, because there is no law for- 
bidding it. 

Social opportunity maybe defined as contact with an 
increasing variety of social influences, and this will be 
effectual in proportion as it becomes general, which, in 
turn, will entirely depend upon the incentives for bring- 
ing it about. The mere authoritative permission or 
legal right of the masses to travel, mingle with refined 



232 WEALTH AND PROGRESS. 

society, to acquire education and general culture, does 
not necessarily constitute an adequate motive or incen- 
tive for them to put forth the necessary effort to obtain 
such objects. The amount of effort devoted to the ac- 
complishment of any object is governed by the inten- 
sity of the desire to be gratified, and the intensity 
of the desire is proportionate to the extent of the con- 
tact with the influences which stimulate it. 

Therefore, as contact with more complex environ- 
ment involves additional effort, and the expenditure 
of effort is governed by the desire, it follows that 
contact with new social influences (opportunity) can 
only become frequent and general according as they 
arise from efforts devoted to the gratification of exist- 
ing wants and desires.* In other words, nothing but 
the force of present desires can sustain the effort neces- 
sary to encounter the pressure of new and more com- 
plex environment. The only natural means, there- 
fore, by which the laborer's opportunities can be en- 
larged is through increasing his economic necessity for 
more frequent contact with an increasingly differenti- 
ated social environment. In other words, to auto- 
matically increase the complexity of his social relations. 

Here, then, is the economic fulcrum upon which 
the lever of statesmanship must be placed, in order to 
effectually raise the industrial and social condition of 
the masses. No change of political institutions or in- 
dustrial conditions which is not based upon this prin- 
ciple can produce any permanent improvement in the 
economic and social condition of the laboring classes. 
Therefore, in dealing with the social problem, the im- 



* " We teach not by lessons, but by going about our business. "- 
Emerson. 



THE TRUE BASIS FOR SOCIAL REFORM. 233 

portant question for the statesman to ask is, What 
political, industrial, or social change, if any, will natu- 
rally call into operation the forces that will uncon- 
sciously and automatically differentiate the higher 
social relations of the industrial classes. According as 
any change, of whatever nature, tends to do this, will 
it tend to develop the laborer's character — increase his 
wants— raise his standard of living — advance his wages 
— increase the consumption and production of wealth 
— dispel industrial depressions, and promote the pros- 
perity and progress of the community. But while no 
measure can be efficacious in improving the laborer's 
condition in any country or state of society which does 
not operate upon and through his industrial and social 
environment, it does not follow that the particular 
change which would most effectually tend to increase 
the social opportunities of the masses under one set 
of industrial conditions would necessarily do so under all 
industrial conditions. For instance, what would tend 
to enlarge the facilities and increase the incentives for 
more complex social relations among the laborers of 
America, England, or in the more advanced conti- 
nental countries, might prove inoperative or even in- 
jurious to the Patagonian, the Jamaica negro, or the 
mass of laborers in Asia, Africa, and South America. 
For while the general law governing economic and 
social evolution is universally the same, the special 
measures necessary to accelerate its movement may 
vary according to the existing industrial and social 
conditions to which it is to be applied. 

The industrial system with which we are at present 
concerned is the wages system. Therefore, in consider- 
ing the question, How can the opportunities of the 
masses be enlarged ? we must always be understood 



234 WEALTH AND PROGRESS. 

to mean the masses in wages-paying countries, espe- 
cially in those where the division of labor and the use 
of machinery most generally prevails. 

It is important at the outset to recognize the fact, 
which we have so often emphasized, that consumption 
is the economic basis of production, and that the 
laborer is as important a factor in the one as he is in 
the other. This being the case, it follows that the de- 
velopment of the laborer's capacity to consume wealth 
is as important economically, not only for his own 
interest, but for that of the capitalist and the com- 
munity, as it is to increase his power to produce. 

The laborer's ability to produce is derived from the 
influence of a very different set of circumstances than 
those which develop his capacity to consume. His 
ability to produce, which depends upon the skill and 
dexterity with which he can manipulate the material and 
implements for producing commodities, is the result of 
frequent contact with the means and conditions of 
production. His ability to consume, which consists of 
his wants, habits, and character, is the effect of fre- 
quent contact with an increasing variety of social in- 
fluences. 

Now, so long as nearly all the laborer's time not occu- 
pied in eating and sleeping is devoted to the former, as 
at present, no commensurate development of the latter 
is possible. Therefore, the first condition for increasing 
the opportunity of the masses to develop their social 
character, and thereby increase their natural capacity 
to consume wealth, commensurate with their power to 
produce it, is more leisure. By leisure, however, we 
do not mean merely unoccupied time. Enforced idle- 
ness is unoccupied time, but it is not leisure. The 
masses, the world over, have a great deal of unoccu- 



LEISURE EXPLAINED. 235 

pied time, but it is mainly in the form of idleness, 
and not that of leisure. Though idleness and leisure 
are both unoccupied time, the economic and social in- 
fluence of the one is directly opposite to that of the 
other. Idleness tends to impoverish, dwarf and de- 
grade, while leisure tends to enrich, develop, and 
elevate character. It is very important, therefore, to 
distinguish clearly between leisure and idleness. Nor 
is this difficult to do if we observe their essential char- 
acteristics. 

As much of the argument in the following pages will 
be devoted to a consideration of propositions for the 
promotion of social progress through increasing the 
leisure of the working classes and reducing their idle- 
ness, it may be well to digress a moment, in order to 
define more clearly the meaning of the terms leisure 
and idleness as they are here employed. 

Whether unemployed time will become leisure or 
idleness entirely depends upon the circumstances under 
which it occurs. There are two conditions necessary 
to render unemployed time leisure : (1) It must be 
time that is not necessary to obtain a living, and (2) it 
must not be in excess of the capacity to utilize it to 
social advantage. Leisure, therefore, may be defined 
as unemployed time capable of being devoted to in- 
dustrial and social, and, therefore, intellectual and 
moral, improvement.' On the other hand, all unem- 
ployed time which lessens the power to obtain a living, 
or which, for whatever cause, cannot be appropriated 
to social advancement, is idleness, and is inimical to 
progress. Idleness, however, may be properly divided 
into two kinds, natural idleness and enforced idleness. 
The former is unemployed time, the use of which is 
not necessary to obtain a living, but which cannot, 



236 WEALTH AND PROGRESS. 

under existing conditions, be utilized for social devel- 
opment, and is exhibited by the two extremes of 
society — barbarian and aristocratic. The latter is un- 
employed time, the use of which is indispensable to 
the maintenance of the prevailing standard of living, 
and applies to the wage-receiving classes. 

While all idleness is inimical to progress, the influ- 
ence of enforced idleness is far more disastrous to civ- 
ilization than that of natural idleness. True, the idle- 
ness of the Esquimaux, Patagonian, or Jamaica negro, 
like that of the sons of the aristocracy, is injurious to 
their social development, but it does not directly in- 
flict nearly so much hardship and degradation, either 
on the individual or the community, as does the en- 
forced idleness of the wage-receiving class. This is 
explained by the fact that the idleness of both the 
former classes consists of unemployed time which is 
not required to obtain the means of subsistence ; con- 
sequently, they are not directly impoverished by it. 
In the case of the privileged aristocracy this is'due to 
the fact that their income, or means of subsistence, 
does not depend upon their own effort, and in that of 
the barbarian to the fact that the number of things 
made necessary by his simple mode of life is so small 
and easy to procure that a few hours' labor a day is all 
that is required to supply them. 

This is not the case, however, with the wage-laborer ; 
his idleness comes in a different way, is of a different 
kind, and produces a very different economic and 
social effect upon society. Having, through the more 
highly complex state of industry, lost the power to em- 
ploy himself, the wage-laborer is compelled to work for 
others, whose sole object is to obtain from him the 
maximum amount of effort for the minimum reward. 



EFFECT OF ENFORCED IDLENESS. 237 

Consequently, when he is employed he is compelled, 
for the most part, through circumstances entirely in 
the hands of the employer — except when limited by 
law or public opinion — to work as hard and as long as 
his physical and nervous energies will endure. This 
being the only condition upon which he can, under 
the wages system, obtain a livelihood, when idle- 
ness is forced upon him all his means of living are 
cut off. 

The enforced idleness of the modern laborer, unlike 
the natural idleness of the barbarian and the aristo- 
crat, does not consist of time that is unemployed, 
merely because it is not necessary for the gratification 
of his wants, but it consists of time, the use of which 
is indispensable to his very existence, except as he 
becomes a pauper or a criminal. 

Again, the inability of the wage laborers to obtain a 
living according to the accepted social standard of 
their class is not only inimical to prosperity and 
progress, but it is more dangerous to property and 
democratic institutions than is that of the barbarians. 
(1) Because he is living in a more highly complex 
state of society, he does not, like the barbarian, pro- 
duce directly for his own consumption, but he pro- 
duces what others consume, and consumes what others 
produce. Thus the consumption of the masses be- 
comes the basis of the market for the wares of the 
whole community, from whose transactions the in- 
come of all the other classes is derived. Conse- 
quently, the failure of the wage-receiving classes to 
consume — which enforced idleness implies — does not, 
as in the case of the barbarian, impoverish the la- 
borer alone, but undermines the prosperity of the 
whole community — so frequently exemplified by indus- 



238 WEALTH AND PROGRESS. 

*rial depressions. (2) The privations of the modern 
laborer are more dangerous to society than those of 
the barbarian. This is because, having reached a 
higher state of social development, he is more sensitive 
to the needs and conscious of the rights of his indus- 
trial and social relations ; and, being more intelligent, 
he is naturally more powerful in producing a social 
and political tornado, if the means of gratifying his 
established and recognized wants are cut off. When 
the barbarians fail to obtain the means of supplying 
their meagre wants, they will die of hunger and dis- 
ease, as they have frequently done by the tens of thou- 
sands, while the modern laborers, when, through en- 
forced idleness, they are deprived of the means of sat- 
isfying their much more complex wants and desires 
(unless supplied from the wealth of the upper classes), 
they will endanger the safety of life, property, and 
government itself. (Witness the political revolutions 
with which the history of every so-called civilized 
country is replete.) 

It will thus be observed that while the natural idle- 
ness of the barbarian tends to stereotype his environ- 
ment and arrest his progress, the enforced idleness of 
the wage-receiving classes threatens the very exist- 
ence of civilization. It may be laid down as a law in 
social progress, that the evil effects of enforced idle- 
ness increase in direct ratio with the advancing com- 
plexity of industrial and social relations. Enforced 
idleness, therefore, is the most serious evil with which 
modern society has to deal. If enforced idleness can 
be prevented, natural idleness will surely be gradually 
eliminated as civilization advances. Enforced idleness 
arises from the failure of the masses to increase their 
economic capacity to consume wealth commensurate 



CAUSE OF ENFORCED IDLENESS. 239 

with their power to produce it,* which is due to their 
lack of opportunity for social development. 

This condition of things is the natural consequence 
of the popular economic heresy of regarding the 
laborer as a factor in production, and ignoring him as 
a factor in consumption ; which, in turn, naturally led 
to the mistaken policy of absorbing the greatest pos- 
sible amount of the laborer's energy and time in the 
former ; consequently, seriously restricting, if not de- 
stroying, his opportunity for developing the latter. In 
this way the growth of consumption has been limited, 
and that of enforced idleness — the greatest of all social 
evils — has been promoted. While all social opportunity 
may not be leisure, all leisure is social opportunity. 

As enforced idleness is the greatest barrier to leisure, 
and leisure is the economic solvent for enforced idle- 
ness, whether or not the social opportunities of the 
masses can be increased turns upon whether leisure or 
idleness shall prevail. If we do not increase the 
former we cannot escape from the latter, with all its 
consequences. 

The immediate and most important question, the 
answer to which is necessary to enable us to take the 
first correct step toward preventing enforced idleness, 
is, how to wisely and permanently increase the leisure 
time of the laboring classes. To this question we are 
now in a position, on the basis of sound economic prin- 
ciples, to give a definite and emphatic answer, which 
is — REDUCE" THE HOURS OF LABOR. 

* See chapter on business depressions, Vol. II. 



CHAPTER III. 

THE ECONOMIC EFFECT OF REDUCING THE HOURS 
OF LABOR. 

Section I. — The General Situation Stated, and the 
Line of Opposition Indicated. 

Before entering upon the consideration of the sub- 
ject, let me say, once for all, that in proposing a re- 
duction of the hours of labor as the indispensable first 
step toward promoting industrial and social reform, we 
do not say that it is the only means that will, under 
any and all conditions, tend to promote that end. 
But what we affirm, and in the preceding chapters have 
endeavored to show, is, that under all conditions, with- 
out regard to race, climate, or state of development, 
the universal principle — the first essential condition 
upon which the permanent progress of society de- 
pends — is the enlarged social opportunities of the masses. 
Under the wages-system, which includes, if not the 
largest, the most advanced portion of the race, upon 
whose progress that of the remaining portion largely 
depends, the safest, the most general, and, conse- 
quently, the most effectual means for increasing the 
social opportunities of the masses is by a general re- 
duction of the hours of labor. 

While there are other more or less effectual means 
of promoting the same end, such as education, free 



CAUSE OF EMPLOYERS' OPPOSITION. 241 

lectures, public libraries, parks, museums, and art 
galleries, these are, and must necessarily remain, 
practically ineffectual, so far as lifting the community 
from its present industrial and social mire is con- 
cerned, unless the leisure time of the masses is in- 
creased. 

Having said this much by way of explanation, let 
us without further delay proceed to consider what 
would be the economic effect upon the community of a 
general reduction of the hours of labor. Society is 
economically divided into three general groups or 
classes, as laborers (wage-receivers), capitalists (em- 
ployers), and land-owners. The incomes of these 
groups take the form of wages, profits, and rent, re- 
spectively. Instead of recognizing the universal law 
that the top is necessarily sustained by the bottom, and 
that the incomes of the upper or profit and rent-receiv- 
ing portions of the community finally depend upon 
the prosperity of the great mass of wage-receivers, it 
is commonly but wrongly assumed that the economic 
interests of these groups are not only distinct, but 
often antagonistic to each other. 

Accordingly, any proposition to increase the social 
opportunities of the masses, by reducing their hours of 
labor, has always encountered the united opposition of 
the profit and rent-receiving classes. Nor is this due, 
as is commonly charged, to an abnormal amount of 
selfishness on their part, but it arises from a gross mis- 
conception of their economic relations to the com- 
munity, and especially to the laboring classes. This 
misconception, as we have already shown, is mainly 
due to the false teachings of political economy. Hav- 
ing been taught that profits move inversely with 
wages, " rising as wages fall, and falling as wages 



242 WEALTH AND PROGRESS. 

rise," * it is not surprising that they should regard 
every effort to improve the laborer's economic condi- 
tion — which always finally involves an increase of his 
real wages— as inimical to their interests. This in- 
verted position in relation to reducing the hours of 
labor has been further strengthened by the fact that 
hitherto the proposition has always been presented 
on sympathetic and philanthropic, rather than upon 
economic grounds. The capitalists have been asked 
to grant this boon, not as an act of wise and broad 
statesmanship, but out of sympathy for or charity 
toward the "unfortunate classes," especially "the 
women and children." To this they have, with some 
degree of consistency, replied, that " factories are 
economic and not charitable institutions ;" that they 
prefer to keep their business and their charities sepa- 
rate, making the extent of the latter dependent upon 
the success of the former. Under the influence of these 
views, they have vigorously resisted all efforts in this 
direction, as being what they regard as attempts to 
make them give something for nothing, in wanton 
violation of all their rights as free citizens. 

We shall doubtless be told by the impersonal and 
irresponsible " we" of journalism that such a propo- 
sition would be a violation of the rights of contract ; 
that profits, which are now so small that ninety per 
cent of all who enter business fail, would be so reduced 
as to bring ruin to the capitalist and disaster to the 
community. And in order to show its special guar- 
dianship over the interests of the " unfortunate 



* " Thus we arrive at the conclusion of Ricardo and others, that 
profits depend upon wages, rising as wages fall and falling as wages 
rise." — Mills " Principles of Political Economy,' Book II., ch. 15, §7. 



ITS EFFECT UPON' WAGES. 243 

classes," we shall be assured that the prosperity of 
the laborer depends upon the profits of the capitalist, 
and that as the laborer is paid according to what he 
produces, especially where piece-work prevails,* a 
reduction of the hours of labor would naturally involve 
a corresponding reduction of wages. Thus, to the em- 
ploying class this measure is presented as containing 
nothing but smaller profits and bankruptcy, and for 
the laborer lower wages, more poverty, and social 
degradation. 

In anticipation of this double line of opposition, we 
shall consider what the economic effect of reducing 
the hours of labor would be upon each of these groups 
separately as follows : (1) What would be its effect 
upon wages ? (2) What would be its effect upon 
profits ? (3) What would be its effect upon rent ? 

First, then, what would be its influence upon wages 
■ — i.e., upon the general rate of real wages ? The cor- 
rect answer to this question largely depends upon the 
extent to which the hours of labor are reduced. That 
is to say, it will depend not so much upon the number 
of hours per day the laborer shall work as upon the 
extent to which his unemployed time shall be in- 
creased. 

Section II. — The Principle which should Govern the 
Reduction of the Hours of Labor. 

Before entering upon the consideration of the main 
question, we will" digress a moment to call special at- 
tention to this point. We do this because the failure 
to recognize its logical and economic importance has 

* See chapter on Piece-work. 



244 WEALTH AND PROGRESS. 

led the well-meaning and often uneconomic friends 
of short-hour legislation to urge it for sympathetic 
but untenable reasons, and thereby expose the move- 
ment to objections which would otherwise have been 
too inexcusable and absurd to be injurious. For ex- 
ample, according to the humanitarian and " ideal 
equity" point of view from which this question has 
hitherto been presented, it is held that the hours of 
labor should be reduced the most where the labor is 
the hardest and the working day the longest. 

Now, this is just the reverse of being correct, and, 
like nearly all conclusions induced by sympathy and 
ideal conceptions of an " ought to be" social state, it 
is an economical and philosophical inversion. The 
error involved in this idea is of the same character, 
and arises from the same source as that which impels 
the endeavor to plant high morality in extreme pov- 
erty and to inaugurate ideal co-operation amid the 
social conditions of barbarism. It should always be 
remembered that unemployed time, like wealth, will 
prove to be an advantage or a disadvantage according 
to the capacity or incapacity of persons to wisely 
employ it. 

Although we have repeatedly emphasized the fact 
that wealth is an indispensable condition to progress, 
we have more than once pointed out that even wealth 
cannot with any permanent advantage be distributed 
in advance of the social need or general capacity 
of the people to wisely consume it. Were it possible 
to arbitrarily double the wealth (wages) of the laboring 
classes to-morrow, it would not increase the average 
comfort and well-being of the masses, simply because, 
as before explained, such a sudden increase of wealth 
in advance of the natural development of the social 



SOCIAL BASIS FOR LESS HOURS. 245 

wants and character necessary for its wise consump- 
tion would inevitably lead to reckless waste, dissipa- 
tion, and vice in a thousand forms. But four times or 
even four hundred times as much wealth can be safely 
distributed among the masses, if it comes in response 
to, instead of in advance of the social need and ability 
to nominally consume it. In short, whenever the dol- 
lar precedes the want, it means waste and dissipation ; 
but when the dollar is preceded by the want it means 
wise consumption and social progress. 

In the same way and for the same reason unem- 
ployed time will prove to be idleness that injures and 
degrades, or leisure that develops and elevates, accord- 
ing to the capacity to socially utilize it ; and this, in 
turn, depends upon the simplicity or complexity of 
the existing social condition of the people. And, as 
repeatedly explained, the wants and desires, or the 
social character, of a people are always commensurate 
with their social opportunities. Accordingly, we find 
that where the laborer's employment is physically the 
most exhausting, and the normal work day the long- 
est, his social opportunities are the smallest, his life 
the simplest, and his character the lowest and weak- 
est ; and, consequently, his ability to wisely utilize 
unemployed time the smallest. 

Thus the American laborer can with advantage to 
himself and the community consume from two to five 
dollars a day, while the sudra of India would be sur- 
feited and demoralized by half that amount.* For 

* Sir Thomas Brassey referring to his father's experience with the 
coolies of India, and the effect of a sudden rise of fifty per cent in 
their wages during the building of railroads in that country, observes : 
" The Hindoo workman knows no other want than his daily portion 
of rice, and the torrid climate renders watertight habitations and 



246 WEALTH AND PROGRESS. 

the same reason, the laborer in Russia, who is em- 
ployed from thirteen to seventeen hours a day, sub- 
sisting chiefly upon black bread and water, could not 
at once employ to social advantage as much unoccu- 
pied time as the laborer of America, England, France, 
and Germany, whose opportunities and material con- 
ditions have been better, and whose social character is 
correspondingly higher. 

Obviously, therefore, to make the greatest reduction 
in the hours of labor where the work is the hardest 
and the working day the longest, is to give the great- 
est amount of unemployed time where there is the 
least capacity to use it to personal or social advantage, 
and thereby defeat the prime object of the measure. 
In truth, a reduction of the hours of labor, in order to 
be economically and socially effective, must be applied 
inversely in degree with the industrial and social deg- 
radation of the masses. In other words, its applica- 
tion must be governed by the principle that the ability 
to utilize new advantages of whatever kind is propor- 
tionate to the extent of previous social opportunities 
and character. That is, " to him that hath shall be 
given," not as a matter of favoritism, but simply be- 
cause he only can appreciate and use, and hence derive 
any advantage from having it. A clear understanding 
of this principle will not only prevent the friends of 
short-hour legislation from exposing the movement to 
many unnecessary attacks, but it will also forever ex- 
plode that stale, illogical, and superficial objection, 
" that if twelve hours' labor a day is better than four- 
ample clothing alike unnecessary. The laborer, therefore, desists 
from work as soon as he has provided for the necessities of the day. 
Higher pay adds nothing to his comforts ; it serves but to diminish 
his ordinary industry.'" — -" Work and Wages" pp. 88, 89. 



ABSURD OBJECTIONS. 247 

teen, then six must be better than twelve, three better 
than six ; and that even none would be still bet- 
ter." It might with equal force be said that because 
moderate eating is more wholesome than gluttony, to 
abstain from food altogether would be even better than 
moderate eating. Indeed, if there were any sense in 
such talk it would follow that sixteen hours' labor a 
day must be better than fourteen, and eighteen or 
twenty still better than sixteen. Therefore, the 
surest way for the masses to obtain wealth and com- 
fort is to work the whole twenty-four. Although the 
utter imbecility of such reasoning when carried to its 
logical conclusion is apparent to the dullest mind, it 
has been for more than a quarter of a century one of 
the stock arguments of the opponents of short-hour 
legislation.* 

Now, to recapitulate, we have seen, (1) That in- 
creased social opportunities tend to increase alike the 
wages of the laborer and the wealth and progress of 
the community. (2) That leisure time constitutes 
social opportunity. (3) That unoccupied time is lei- 
sure only proportionate to the existing capacity to 
socially utilize it. (4) That under the wages (or fac- 

* The New York Evening Post, one of New York's most respectable 
dailies, which takes special pride in the soundness of its economic 
reasoning, on the 1st cf May, 1886, in an editorial over a column in 
length, devoted to a criticism of an article of mine on the eight-hour 
question in the April number of the Forum, employed the above argu- 
ment in the following language : "It is sufficient, therefore, to sug- 
gest that the principle that we have considered may eventually lead to 
the entire extinction of the primeval curse of labor. We know of no 
reason why, if a reduction of the hours of labor infallibly leads to an 
increased production of wealth, the condition of the race should not 
be infinitely improved by the general cessation of tiresome exertion." 
And this editorial was reprinted entire in the New York Nation for 
May 8th, 1886. 



248 WEALTH AND' PROGRESS. 

tory) system of industry, the most feasible way of in- 
creasing the leisure and, therefore, the social oppor- 
tunities of the masses is by a general reduction of 
the hours of labor. (5) That while a reduction of the 
hours of labor is the only practical means of increasing 
the laborer's leisure, whether the unoccupied time 
given to him by such a measure will tend to increase 
his leisure or add to his idleness, will depend upon 
whether or not the extent of the reduction is in excess 
of the capacity of the average laborer to use it to his 
personal and social advantage. 

It will thus be observed that while the principle here 
laid down is universally sound, if it is unscientifically 
applied the result may not only prove to be not bene- 
ficial, but it may be positively injurious to the best in- 
terests of the community. Manifestly, therefore, the 
extent to which the hours of labor are reduced must 
be an important factor in determining the economic 
effect of that measure upon the community. 



SECTION III. — How much can the Hours of Labor be 
Safely and Wisely Reduced ? 

If we were called upon to answer that question for 
the Patagonian, the Jamaica negro, or the coolie of 
India, where hand labor and " natural idleness" pre- 
vail, we should probably find that larger social oppor- 
tunity for them lies in the direction of a closer contact 
with the industrial whips and spurs of the wages Ol- 
factory system, with its machinery and division of 
labor, and even by an increase instead of a reduction 
of the hours of labor. And if we were considering the 
question in relation to the laborers of Russia, Turkey, 



APPLICATION OF THE PRINCIPLE. 249 

or Austria, where the wages system exists only in its 
first and most barbarous stages, and where the laborers 
work from thirteen to sixteen hours a day, living 
mainly on black bread and broth, amid the social con- 
ditions but slightly removed from those of the Middle 
Ages, a reduction of the hours of labor to ten per 
day would probably give them all the unoccupied time 
they could safely be trusted with. 

But we are not considering the question with refer- 
ence (except indirectly) to the laborers in the lowest, 
but to those in the highest stages of civilization — not 
in relation to those whose social opportunities have 
been the most limited, but with reference to those 
whose opportunities have been the greatest, and whose 
social character is accordingly the most highly differ- 
entiated. If this proposition can be successfully ap- 
plied in a few of the most advanced countries — as 
the United States, England, France, and Germany, 
and, perhaps, Belgium and Switzerland — nothing can 
prevent it from extending to the less developed coun- 
tries as fast as they adopt improved methods of pro- 
duction and become a part of the modern industrial 
system. 

We will consider the question, then, with special 
reference to its effects in the United States, England, 
France, and Germany. For while these countries are 
politically distinct, and in some respects quite differ- 
ent, economically they may be regarded as practically 
all one. They all employ the same methods of pro- 
duction, pursue the same industrial policy, and very 
largely buy and sell in the same markets. In fact, 
the present means of transportation and communi- 
cation are such that a change of a half cent in prices 
in any one country is felt almost simultaneously 



250 WEALTH AND PROGRESS. 

in them all. And despite superficial perturbations 
resulting from discriminating tariffs and other local 
causes, the remarkable uniformity of industrial de- 
pressions* clearly shows that the industrial prosperity 
of all thdse countries is governed by the same general 
economic causes. It is not only true that for all the 
purposes of economic reasoning and for industrial legis- 
lation these countries are one, but whatever will dispel 
the industrial and social chaos in those four countries 
will redeem all Christendom, and give civilization such 
momentum that even in Asia and Africa the days of 
barbarism will be numbered. What are the hours of 
the average working day in those countries, and how 
much can they be safely — economically — reduced? 

In this country, outside of Massachusetts,*!* except 
in a few limited trades, the hours of labor range from 
eleven to thirteen per day. Although data for ascer- 
taining the exact average for the whole country is 
difficult to obtain, it may safely be placed at eleven 
and one half hours. But in order to be sure of under 
rather than overstating the case, we will put it at 
eleven hours. 

In England they are fixed by statute at nine and one 
half, in France at twelve, and in Germany, while there 
is no law regulating the hours of labor, custom has 
limited the nominal working day to twelve hours. % 



* See First Report of United States Commissioner of Labor, 1S86, 
p. 290. 

f Since writing the above, a ten-hour law has been adopted in Rhode 
Island, and bills have been introduced into the Legislature in Maine 
and New Hampshire for that purpose. 

\ In many parts of Germany the hours of labor are thirteen and 
fourteen per day. See Young's "Labor in Europe and America," 
P- 573- 



A N EIGHT- HO UR S YS TEM. ■ 251 

Thus, in these countries, taken all together, the aver- 
age working day is about eleven and one eighth hours 
a day. How much, then, can these hours be safely 
reduced — i.e., how much can they be reduced without 
promoting' dissipation, instead of improvement, among 
the great mass of the laborers in those countries ? 

It should ever be remembered in this connection 
that wise statesmanship can never do more in economic 
and social affairs than influence the direction of gen- 
eral tendencies, and also that it is the character of the 
great mass — the seventy or eighty per cent of the 
community — that determines the direction and moulds 
the character of the social and political institutions. 

In the light of experience, to which we shall here- 
after refer, and the present highly complex industrial 
conditions in the above-named countries, there can be 
no doubt as to the economic and social safety of re- 
ducing the normal working day for adults to eight 
hours, and that of children under sixteen years of age 
to half time. 



SECTION IV. — The Direct and Immediate Effect of an 
Eight-Hour System. 

What would be the natural effect upon wages of the 
general adoption of an eight-hour system in the 
United States, England, France, and Germany ? In 
order to understand the proposition clearly, we will 
consider, first, its effect upon wages if it were adopt- 
ed only in this country. According to the last cen- 
sus (1880), the total population of this country was 
50,155,783. Of this number, 36,761,607 were over ten 
years of age, and 17,392,099, or nearly one half, of 



252 WEALTH AND PROGRESS. 

those over ten years of age were engaged in the vari- 
ous occupations. Of these, 1,017,034 were engaged in 
the various professions, as lawyers, physicians, clergy- 
men, teachers, journalists, actors, etc., and 1,479,634 
were manufacturers, merchants, bankers, traders, 
clerks, etc., leaving 14,895,431 who properly came 
under the head of laborers. Of this number, however, 
4,347,617 are farmers and others engaged in agricul- 
ture, who work for themselves, and hence they cannot 
be strictly classed as wage-laborers, although a large 
per cent of them work for wages a considerable por- 
tion of the time, and would be directly affected by an 
eight-hour system. The remaining 10,547,814 are ex- 
clusively wage-receivers. In other words, thirty-four 
per cent of the whole population actually participate 
in industrial pursuits. Twenty per cent of the whole 
population — sixty per cent of those engaged in all occu- 
pations — and seventy four per cent of all engaged in in- 
dustries, outside of agriculture, work for wages. If we 
exclude from this number the 1,075,655 domestic ser- 
vants, there are still 9,472,159 persons actually engaged 
in productive industries who work exclusively for wages. 
The general adoption of this measure would properly 
include the whole 14,895,431 ; but, in order to avoid 
captious objections, we will consider its economic effect 
upon the laboring classes, if only applied to the 9,472,- 
159 who work exclusively for wages. This number 
consists of 8,353,803 adults of both sexes and 1,1 18,356 
children under fifteen years of age. 

All considerable industrial and social changes pro- 
duce two effects. One is immediate and more or less 
temporary, and the other secondary and permanent, in 
its character. Whether the latter is in harmony or con- 
flicts with the former depends upon the economic 



THE FIRST EFFECT OF EIGHT HOURS. 253 

soundness of the measure adopted. Most legislation, 
especially upon industrial questions, has been adopted 
with special reference to its immediate effect, and 
often in utter ignorance of the natural tendency of its 
permanent influence ; and not infrequently the latter 
has proved to be the mere reaction and its effect to be 
the opposite of the former. Such has been the case 
with all abnormal expansions and contractions of the 
currency, and, indeed, with all attempts to regulate 
wages, profits, interest, rent, etc., or to otherwise im- 
prove society by means which do not first operate 
upon and through the social opportunities and charac- 
ter of the people. 

The adoption of an eight-hour system, however, 
would be an exception to this rule. Its immediate 
effect, which is all that has hitherto been recognized, 
would, as we shall soon see, be in perfect harmony 
with its ultimate and permanent economic influence. 
The first and immediate effect of the general adoption 
of this system would be to reduce the working time of 
the 8,353,803 adult laborers three hours a day, or about 
twenty-seven per cent, and that of the 1,118,356 chil- 
dren seven hours a da} 7 , or sixty-four per cent. This 
would withdraw 25,061,409 hours of adult labor and 
7,828,492 hours of child labor from the market with- 
out discharging a single laborer. The industrial vac- 
uum thus created would be equal to increasing che 
present demand for adult labor thirty-one per cent, 
and that of child labor fifty per cent. In other words, 
without increasing either our home or foreign market, 
but simply to supply the present normal consumption, 
besides creating a demand for 1,118,356 children under 
sixteen years of age to work the other half day with 
those already employed, it would create employment 



254 WEALTH AND PROGRESS. 

for 3,552,059 new laborers. In order to do this, about 
twenty per cent more factories and workshops would 
be needed, besides setting all our present idle machin- 
ery in operation. This, it is needless to say, would 
create a further demand for labor in the mines, quar- 
ries, forges, furnaces, iron works, and other industries 
that contribute to the building and equipment of the 
new factories and workshops. 

Now, enforced idleness is the greatest obstacle to 
social progress. All careful students of social economy 
have come to recognize the fact that nothing can per- 
manently improve the condition of the laboring classes 
which does not dispel that industrial terror, enforced 
idleness, which is exactly what the uniform adoption 
of this measure would succeed in doing. 

According to the report of the United States Com- 
missioner of Labor (1886*), there are in this country 
about one million unemployed laborers, or about five 
and one half per cent of the whole number engaged in 
all occupations. This, it will be observed, is only a 
little over one fourth (twenty-eight per cent) of the 
number of new laborers that would be required by the 
general adoption of this system. There are no exact 
data as to the number of unemployed in England, 
France, and Germany. It may be safely assumed for 

* The exact language of the report is as follows : " Applying the 
percentage arrived at (seven and one half per cent), we obtain a total of 
998,839 as constituting the best estimate of the possibly unemployed in 
the United Slates during the year ending July 1st, 1885 (meaning by 
the unemployed those who during the time mentioned were seeking 
employment), that it has been possible for the Bureau to make. It is 
probably true that this total (in round numbers 1,000,000), as repre- 
senting the unemployed at any one time in the United States, is fairly 
representative, even if the laborers thrown out of employment through 
the cessation of railroad building be included," pp. 65, 66. 






THE NUMBER OF UNEMPLOYED. 



255 



general purposes, however, that, on the whole, the 
proportion to the number actually engaged in the vari- 
ous occupations is approximately the same as in this 
country. 

According to the latest returns, the total number of 
persons engaged in the various industries in the above- 
named countries is as follows : 



Countries. 



France 

Germany 

England and Wales 
Scotland , 

Total 



Persons 
Employed. 



14,996,998 

18,986,494 

11,187,584 

1,606,984 



46,778,060 



Per cent 
of Popu- 
lation. 



43 
42 

43 h 
43 



Assuming the unemployed to constitute five and 
one half per cent of this number, as in this country, 
there are in those countries 2,572,793, which, added 
to the 1,000,000 in this country, makes a grand total 
of 3,572,793, being only 20,734 more than the number 
of new employments created by this measure. 

It is thus clear that the general adoption of an eight- 
hour system for adults and half time for children under 
sixteen years of age in the United States alone would 
nearly absorb all the unemployed laborers in America, 
France, Germany, and England, including Scotland and 
Wales. This, we repeat, is not a fanciful speculation, 
based upon an imaginary expansion of our home or for- 
eign market, but it is what would necessarily result from 
the natural operation of economic forces in the effort 
to supply the present normal consumption. The em- 
ployment of nearly four millions of new laborers would 
necessarily increase the number of consumers, and 



256 WEALTH AND PROGRESS. 

thereby enlarge the market for commodities to that 
extent. That such a result would tend to increase 
wages is very clear. Although wages would not neces- 
sarily rise in the same proportion that enforced idle- 
ness was reduced, all the influences would be in that 
direction. 

By the absorption of the unemployed and the con- 
sequent diminution of competition among the labor- 
ers for employment, the power of the direct influ- 
ences that tend to promote the rise of real wages 
would be increased. In other words, the power of 
natural forces to raise wages increases as the opposing 
pressure of enforced idleness is diminished. Mani- 
festly, therefore, the adoption of the measure under 
consideration, by absorbing the enforced idleness and 
able-bodied pauperism in this and the three leading 
countries in Europe, would at once tend to reduce 
poverty, increase the consumption of wealth, and raise 
wages. 

If this would result from its application in the 
United States alone, what, it may be asked, would be 
the effect of its adoption in England, France, and 
Germany at the same time ? Let the facts answer. 

The number who work for wages in those countries, 
according to the most recent data upon the subject,* 
is in France, 8,700,515 ; Germany, 10,970,845 ; Eng- 
land and Wales, 9,317,374, and in Scotland, 1,324,077, 
making a grand total of 30,312,811. Of this number 
there are of both sexes engaged in domestic service, 
in France, 739,544 ; Germany, 938,294 ; England and 
Wales, 1,803,810, and in Scotland, 176,565, making a 

* The official returns in the respective countries as given in 
J. Scott's latest " Statesman's Year-Book" for 1886. 



CREA TES NE W EMPLO YMENTS. 257 

total of 3,658,213, leaving, exclusive of domestic ser- 
vants, 26,654,598 who work for wages. Exactly what 
proportion of this number is composed of children 
under sixteen years of age I am unable to ascertain. 

Fortunately, however, we have those facts for this 
country, which will serve as a safe basis for an approx- 
imately correct general estimate. 

In 1880 there were in the United States 1,118,356 
children under fifteen years of age employed in the 
various occupations, being at that time about eleven 
and eight tenths per cent of the whole number work- 
ing for wages in productive industries. Assuming the 
same proportion of those who work for wages — ex- 
clusive of domestic servants — in Europe are children 
under that age (which is a very low estimate), the 
26,654,598 wage laborers consist of 23,509,256 adults 
and 3,145,342 children under fifteen years of age. 

Now, to reduce the working time of the adults to 
eight hours each day, and that of the children under 
sixteen years of age to half time, would withdraw 
from the market 92,545,162 hours' labor each day with- 
out discharging a single laborer. But in order to 
put the children now at work on half time would ne- 
cessitate the immediate employment of 3,145,342 ad- 
ditional children to work the other half day with them. 
This would take 12,581,368 hours a day, leaving a net 
withdrawal of 79,963,794 hours' labor a day, which 
would be equal to creating employment for 9,995,474 
adult laborers. This number added to the 2,627,434 
days' work created by its adoption in this country 
makes a grand total of 12,622,908 created in the four 
countries by a general adoption of an eight-hour and 
half-time system. 

It may be objected by the opponents of this propo- 



258 WEALTH AND PROGRESS. 

sition. that it cannot be successfully applied to agricul- 
tural laborers. To avoid this objection — although it is 
untenable, especially where modern machinery is used 
— we will eliminate agricultural laborers as well as do- 
mestic servants from the calculation. 

The number working for wages in the four countries 
referred to is 11,931,525. Three hours a day for this 
number equals 4,474,321 days' labor. Deducting this 
number from the grand total of 12,622,908, leaves 8, 148,- 
587. Or, to state the case another way, the simultaneous 
and uniform adoption of this proposition in the United 
States, England, France, and Germany (exclusive of 
agricultural laborers and domestic servants), besides 
giving half-time employment to 4,263,698 children, and 
absorbing all the unemployed laborers and able-bodied 
paupers in the above countries, would create a demand 
for more laborers than the total number now working 
for wages in productive industries in Belgium, Holland, 
Norway, Sweden, Switzerland, Portugal, and Ireland 
combined. If it would only do half this, it would 
more than absorb all the enforced idleness and able- 
bodied pauperism in this country and Europe to-day. 

But even if it only created sufficient employment to 
absorb the 3,572,793 unemployed laborers referred to, 
which we have seen would be accomplished by its 
adoption in this country alone, it would increase the 
demand for general products equal to adding to the 
present market the entire consumption of the wage- 
receiving classes of Belgium, Holland, and Switzerland, 
which, it is needless to say, would make a proportion- 
ately larger production ; and, consequently, more 
laborers would be necessary. 

That a measure which would do this, without arbi- 
trarily molesting vested interests, invading the rights 



WHAT EIGHT HOURS WOULD DO. 259 

of property, or disturbing the prevailing methods of 
trade, commerce, or industry, would tend to advance 
wages and improve the condition of the laboring 
classes is too obvious to need discussing. For while, 
as already observed, wages would not rise proportionate 
to the diminished relative supply of labor, the removal 
of enforced idleness would enable the influence of 
social forces to push wages up to the maximum, instead 
of being forced down, as at present, to the minimum 
rate consistent with economic and social safety. 

If anything approximating to such results could be 
shown on a scientific basis, for any form of state 
socialism, land nationalization, tariff, or currency re- 
form, it would be deemed sufficient to warrant, if 
necessary, the overthrow of existing institutions for 
their accomplishment. 

Section V. — The Permanent Economic Effects. 

Thus far we have considered the proposition only 
with reference to its immediate and perhaps temporary 
effect. What would be its secondary and permanent 
influence? is the next and still more important 
question. 

A little consideration will show that while this would 
be more gradual, permanent, and far-reaching in its 
nature than the first, its tendency and influence would 
be in the same direction and in perfect harmony 
with it. Indeed, it is in the gradual and permanent 
effect — for which the first merely clears the way — that 
the real economic and social importance of this propo- 
sition consists. Were it otherwise, its economic sound- 
ness would be questionable, and its adoption, to say the 
least, an act of very doubtful expediency. 



260 WEALTH AND PROGRESS. 

It is a well-established principle in political economy 
that the extent of the demand for commodities deter- 
mines business prosperity. It is equally clear, though 
less understood, that this demand is governed by the 
habitual consumption of wealth by the masses. Nor 
is it any less evident that the consumption of wealth 
in any community is finally determined by the general 
standard of living in that community. It is the 
essence of economic law that whatever tends to develop 
the wants, raise the standard of living, and elevate the 
social character of the masses, necessarily tends to 
promote the advance of real wages. 

The first condition necessary to the development of 
character is social opportunity, which, under present 
conditions, more leisure alone can give. This indis- 
pensable condition for social progress is what the 
measure before us is specially designed to furnish. 
Simultaneous with the immediate effects referred to, 
over thirty-six millions of laborers would leave their 
work each day less exhausted, mentally and physi- 
cally, and have three hours' extra leisure time on their 
hands, which means so much positive opportunity for 
family life and general social intercourse. With more 
leisure and less exhaustion the laborer, from various 
motives, will be continually forced or attracted into 
new and more complex social relations, which is the 
first step toward education and culture, in the broadest 
sense of the term. In short, it means his gradual in- 
troduction to a new social environment, the uncon- 
scious influence of which would necessarily awaken 
and develop new tastes and desires for more social 
comforts. He would desire more wholesome and bet- 
ter appointed homes, more travel, literature, enter- 
tainment, etc. Not to speak of the intellectual, 



THE OSCILLATION OF WAGES. 261 

moral, and political influence to result therefrom, which 
we shall consider hereafter, the purely economic effect 
of this would be little short of a revolution. In pro- 
portion to the frequency that the new desires were grati- 
fied, the development of which, under such conditions, 
no power on earth could prevent, would they crystallize 
into urgent wants and necessities, the satisfaction of 
which would become an essential part of the standard 
of living, demanded by the social habits and character 
of the people. 

The accepted standard of living being the economic 
law of wages, to raise the standard of living of the 
masses is necessarily to increase the rate of wages. 
By the accepted standard of living, we mean the stand- 
ard of living which the consensus of that class or 
country has determined is requisite to material com- 
fort and social decency, and below which one cannot 
permanently go without incurring social disadvantage. 
A few laborers in any class or community may adopt 
a standard of living considerably above or below that 
generally adopted by the great mass or general aver- 
age of that class, but the standard of living thus 
adopted by exceptional individuals does not determine 
the general rate of wages, nor even their own wages. 
Wages, like all economic elements, are governed not 
by individual, but by general social forces. 

Some slight perturbations in wages may be de- 
termined by the individual character and capacity of 
the laborer himself, but the sphere in which those 
oscillations can occur is absolutely determined by the 
social character of the great mass. For example, the 
wages of a certain class of laborers in China may oscil- 
late between seven and twelve cents a day, accord- 
ing to ability, necessity, etc., but from the sphere of 



262 WEALTH AND PROGRESS. 

thirty or forty cents a day, he is absolutely debarred. 
Indeed, to attempt, for any personal reasons, to ob- 
tain such wages would simply exclude him from em- 
ployment altogether. 

If he comes to this country the sphere of these oscil- 
lations is entirely changed. Here it will probably be 
between forty and sixty cents a day, instead of from 
seven to twelve cents, as in China. This difference is 
wholly due not to his individual character, but to that 
of the community, which he has taken no real part in 
determining. It is not the character of the ten or 
twenty per cent, but those of the eighty or ninety per 
cent, that determines the socially accepted standard 
of living in any class or country. It will be seen, 
therefore, that if an eight-hour system only applies 
to a small fraction of the laboring class, it might not 
produce any permanent effect upon the general rate of 
wages, or even appreciably change that of those who 
are directly affected by it. 

But if it was applied to the whole nine and one half 
millions of laborers in this country, or, as we propose 
to do — apply it to the whole thirty-six millions, who 
with their families embrace nearly all of the lower half 
of the entire population in this country, France, and 
Germany — it would generate a social force, the full eco- 
nomic influence ol which it is impossible to calcu- 
late. 

The influence of the change here proposed would 
be even greater upon the children than upon the 
adults for two reasons : (i) Because the character of 
children under the age of fifteen is much more sus- 
ceptible to social influences than that of older per- 
sons. (2) Because the children will be under the ele- 
vating influences of educational institutions a portion 



THE EFFECT OF HALF-TIME SCHOOLS. 263 

of each day. By this means, within a single decade 
every laborer of twenty years of age, both in this 
country and in Europe, would have had five, and many 
of them seven or eight years' daily contact with the 
educational, moral, and social influences of school 
life. It is clear, therefore, that the necessary conse- 
quence of the general adoption of the half-time school 
system alone would be not only to greatly improve 
and elevate the home, but to almost revolutionize the 
domestic and social atmosphere of the masses within 
a single generation. 

The advance of the general rate of wages, conse- 
quent upon a higher standard of living, would produce 
a corresponding increase in the general demand for 
commodities in the four greatest wealth-consuming 
nations in the world. The satisfaction of these new 
wants would create a permanent international market 
for new products more than equal to that of the en- 
tire population of this country, which would, in turn, 
create new industries and, therefore, new employ- 
ments, and further increase the demand for labor. 
But, it may be asked, will not this increased demand 
for labor and rise in wages involve a corresponding 
rise of prices ? We answer No ! Indeed, that would 
not be a rise in real wages, because if the prices of 
commodities increased in the same proportion that 
wages rose, the laborer would obtain no more wealth 
for a day's work than formerly, and therefore would be 
economically and socially no better off. But, it may 
be replied, "you laid it down in a previous chapter, 
that prices were determined by the cost of production, 
and that the controlling element in the cost of pro- 
duction is wages. If this be true, does it not fol- 
low that an increase of wages involves a rise of 



264 WEALTH AND PROGRESS. 

prices?" Paradoxical as it may appear, we again an- 
swer No ! 

It is true that we laid it down that prices are deter- 
mined by the cost of production, and that the cost of 
production is governed by wages, and that if wages 
were arbitrarily and locally increased, it might and 
probably would, temporarily at least, tend to raise 
prices. It will be remembered, however, that we also 
explained that the increased consumption of wealth 
accompanying a general rise of real wages tends to 
promote the use of improved machinery — or a greater 
concentration of capital in production, and in that way 
therefore cheapens the cost — which always tends to 
reduce prices, and is the same as a still further increase 
of real wages. The larger the market the lower the 
price, is one of the best-established principles in polit- 
ical economy, as well as one of the best-attested facts 
in economic history. The successful use of improved 
machinery, which is the only means of permanently 
reducing the cost of production and lowering prices, is 
possible only with the use of large capitals and exten- 
sive production. It is equally true that the use of 
.large capitals and extensive production is compatible 
only with a large aggregate consumption of wealth, 
which nothing but a high standard of living can sustain. 

Obviously, therefore, whatever tends to increase the 
aggregate consumption of wealth per capita neces- 
sarily tends to reduce the cost of production and lower 
prices. This explains why the comforts and luxuries 
of life are cheaper in England now, with labor at five 
shillings a day, than they were in the Middle Ages, 
with labor at less than sixpence a day, and why wealth 
can be produced cheaper in America at two dollars a 
day than in China at ten cents. 



ADVANCE OF REAL WAGES. 265 

It becomes clear, then, that the uniform adoption in 
the United States, England, France, and Germany of 
an eight-hour system would rapidly abolish enforced 
idleness and able-bodied pauperism, tend to continu- 
ally extend the consumption and production of wealth, 
increase the comfort, education, and culture of the 
masses, and permanently advance real wages, without 
arbitrarily disturbing existing institutions. 



CHAPTER IV. 

THE EFFECT OF AN EIGHT-HOUR LAW UPON PROFITS. 

If it were true, as taught by orthodox economists, 
that " profits fall as wages rise," the fact that a reduc- 
tion of the hours of labor would tend to increase wages 
would be a sufficient reason why the employing class 
should oppose it, as they almost invariably have done. 
The logic of this theory is that the economic interests 
of the wages and profit-receiving classes are necessarily 
antagonistic to each other. This doctrine, like all 
error, cuts more than one way. While it has served 
its obvious purpose in supplying the employing class 
with a defence for their almost universal endeavor to 
keep down wages, it has at the same time laid the 
foundation and furnished the arguments for that most 
erroneous belief among the masses that the profit- 
receiver is their natural economic enemy ; hence, to 
foil or despoil him, by whatever means, is to promote 
their interest. 

This unfortunate view, which has been so fertile in 
promoting the use of the most uneconomic means for 
social and industrial reform, has led the more mod- 
ern economists to give a somewhat modified rendering 
of the doctrine, asserting that " capital, and labor are 
allies, not enemies." While this presentation has a 
more satisfactory seeming, upon examination it will 
be found to contain the real error of the Ricardo- 
Mill theory. For, although it affirms, correctly, that 



A PLAUSIBLE ERROR. 267 

the laborer and employer are natural allies, whose 
economic interests are inseparable, it is always upon 
the presumption that the success of the alliance pri- 
marily depends upon the prosperity of the capitalist or 
employer. Whereas, the reverse is true, and, as else- 
where explained,* the prosperity of the employing and 
mercantile classes ultimately depends upon that of the 
laboring class — upon the economic capacity of the 
masses to consume wealth. 

There is a certain sense in which the Ricardo-Mill 
theory has, at least, a plausible appearance of truth. 
For example, if it cost in raw material, building 
machinery, etc., sixty cents a pair to manufacture 
shoes, and they could be sold at one dollar, clearly 
forty cents a pair would remain to be divided between 
the laborer and his employer. In whatever propor- 
tion this surplus is divided between wages and profits, 
if all other things remain the same, Mr. Ricardo's 
statement that a rise of wages is a fall of profits, and 
vice versa, would be correct. Assuming each received 
twenty cents a pair, it is a mere matter of mathematics 
to see that, if wages rose to twenty-five cents, profits 
must at the same time and for that very reason fall to 
fifteen cents a pair. Consequently, if wages could be 
reduced to five cents a pair, profits would rise to 
thirty-five cents a pair. This appears plausible, and 
even conclusive, and has been generally accepted as 
unanswerable. 

It will be remembered, however, that, clear as all 
this seems, it is true only provided that something 
else is true — viz., that all other things remain the same 
— i.e., if the same number of shoes could be sold at 

* Chapter II., Part I. 



268 WEALTH AND PROGRESS. 

the same price. This, however, is a condition which 
never is and never can for any considerable time exist. 
If the shoes were exclusively consumed by a commu- 
nity which had no economic relations with that which 
produced them, this would be possible. If, for in- 
stance, all the shoes could be consumed by the people 
of another planet, or by a people who are so remote, 
geographically and socially, from the scene and con- 
ditions of production that the wages of the laborers 
who made them formed no part, directly or indirectly, 
of the market in which they were sold, such a condi- 
tion might prevail. 

This, however, is almost an economic and social im- 
possibility. If the laborer was merely a factor in pro- 
duction and exercised no influence upon consumption, 
as he has been so commonly regarded, all this might 
be true ; but as the consumption of the laboring 
classes constitutes the preponderating element in the 
general market for commodities — and as the laborer is 
constantly increasing as a factor in consumption and 
decreasing as a direct factor in production, as fast as 
improved machinery is adopted — the possibility of 
" other things remaining the same," when wages are re- 
duced, is constantly becoming more and more out of the 
question. In other words, the quantity of shoes that 
can be sold and the price that can be obtained for them 
— the extent of the market — is becoming to depend 
more and more upon the consumption or wages of the 
laborer. Therefore, a reduction of wages directly tends 
to limit the market for commodities. 

If the demand for shoes is lessened, the manufac- 
turer is soon forced either to sell fewer shoes or sell 
them at a lower price. In either case, the actual 
amount of profit he will receive, as well as the rate per 



FALL OF WAGES NOT A RISE OF PROFITS. 269 

dollar invested, will be reduced. Therefore, to say that 
a reduction of wages, " other things being the same," 
means a rise of profits, is essentially false, because the 
only condition upon which such a result can follow is 
one that is never present, in any general sense. 

The error involved in this doctrine appears to arise 
mainly from the mistake of regarding wealth as a fixed 
instead of a varying quantity. If the question of wages 
and profits was a matter of the division of a given 
amount of wealth already in existence, the distribution 
of which had no influence upon future production, this 
theory might have some force. But when it is a ques- 
tion of the distribution of wealth, the amount of which 
in the future depends upon how that now existing is 
distributed, as it always does in an industrial society, 
the case is very different. One is a question of arith- 
metical division, and the other one of economic law. 
It is only with the latter that economic science is con- 
cerned and in which the community is interested. 
Clearly, therefore, as profits depend upon the extent 
and continuity of the demand for commodities, which, 
in turn, depends mainly upon the consumption or 
wages of the laboring classes, a fall of wages cannot in 
any general sense tend to promote a rise of profits. 
The concern of the laborer is not so much as to 
whether he shall have one or three dollars a day, but 
as to the actual amount of wealth he can finally obtain 
for a day's labor. For the same reason, the manufac- 
turer has no special interest in a high rate of profit. 
What he really wants is a large actual income. On the 
other hand, the community has no special interest in 
reducing the actual income of the manufacturer. Its 
only concern is to increase its own. This result, how- 
ever, is compatible only with an increase in the gen- 



270 WEALTH AND PROGRESS. 

eral rate of real wages. Low wages involve a rela- 
tively small aggregate consumption, which always im- 
plies slow methods of production, and slow methods 
of production make a high rate of profit inevitable, 
even to obtain a small income. 

Suppose a manufacturer of shoes, in order to live 
according to the accepted standard of his class, was 
forced to charge a profit of ten cents a pair ; and if, by 
using improved machinery, he could make the same 
shoes for one third less, and be enabled to sell twice as 
many, he could reduce the price of the shoes to the 
consumer, and actually obtain more wealth per day for 
himself at a profit of six cents a pair, than he had pre- 
viously done with his small production at a profit of 
ten cents a pair. It will be observed that this can 
only occur according as the aggregate demand for 
commodities (real wages) is increased ; which is pre- 
cisely what has always taken place just in proportion 
as wages or the demand per capita of the population 
has increased. This explains why the manufacturer 
of to-day is actually richer with a profit of two cents a 
pound on cotton cloth than he was fifty years ago with 
a profit of more than double that amount. 

Thus it is clear that by the increased aggregate pro- 
duction, consequent upon the larger general demand 
for commodities (higher wages), all classes would be- 
come actually richer. The laborer would get more 
wealth through his increased wages — the general con- 
sumer would obtain more through lower prices — and 
the manufacturer, while receiving a smaller per cent of 
the total product in profits, will actually obtain a greater 
quantity of wealth through the larger productions and 
extended business. 

This principle is fully illustrated by the experience of 



SHORT HOURS NO INJURY TO CAPITAL. 27 1 

England, where the hours of labor are shorter and the 
wages higher than in any country in Europe ; and the 
increase in the use of capital and the production of 
wealth per capita is greater than in any country in the 
world.* Instead of English products being under- 
sold by those of the long-hour and low-paid conti- 
nental laborers, it is to protect themselves against the 
competition of the products of the nine and one half 
hour laborers of England that the high tariffs are im- 
posed in every country on the continent, and in this 
country as well. We are not afraid to compete with 
the products of the thirteen to sixteen-hour labor of 
Russia, Austria, and Italy, but it is the products of 
England, where the hours of labor are the least of 
those in any country in the world, that we are most 
anxious to exclude. 

The fact that a diminishing per cent of the total 
product goes to profits is not an economic disadvan- 
tage to the capitalist, for the reason that while a 
smaller per cent of the aggregate wealth will go for 
profits, the relative size of the profit-receiving class is 
diminishing in a still greater ratio. Hence, the capi- 
talists are becoming both absolutely and relatively 
richer and relatively fewer in number as the aggregate 
wealth increases. 

This being the natural result of a general rise of 
wages, which in the last chapter we have seen would 
be the logical consequence of the adoption of an eight- 
hour system, it follows that the economic effect upon 
profits by the adoption of that system would be to 
diminish profits relatively to the aggregate wealth and 
population, and to increase them actually and relatively 

* See Chapter VIII., Part III., pp. 336, 338. 



272 WEALTH AND PROGRESS. 

to the number of the profit-receiving class. In other 
words, it would tend to reduce profits in proportion to 
the wealth and number of those by whom they are 
paid, and to increase them in proportion to the num- 
ber by whom they are received. 

Obviously, therefore, it would tend to improve the 
economic and social condition of the laboring classes with- 
out injuring that of the capitalist. In order to procure 
the full advantages of this measure without incurring 
the temporary disadvantages incident to all social 
changes, two conditions are necessary, both of which 
are attainable : (i) That its adoption be general, and 
(2) That it be gradual. 

The adoption of this measure should be general, 
because all its important economic effects to which 
we have referred arise from its influence upon the 
general social character of the masses, which, to be 
effectual, must necessarily be general ; at least, it 
must be sufficiently so to be national. Not that it 
would be entirely useless to reduce the hours of labor 
in a single city, industry, or state, but the temporary 
disadvantages would be greater, and the permanent 
benefits arising therefrom would be not only very 
much less, but very much less in proportion to the 
number affected by it. Thus, e.g. , if it were adopted 
simultaneously in America, England, France, and 
Germany, it would permanently affect the social at- 
mosphere of the masses over the best part of the civ- 
ilized world. The economic effect of so extensive an 
influence would probably be ten times greater than if 
it were only adopted in any one of those countries. 
And if it were applied to the whole ten millions of 
wage laborers in this country, the economic advantages 



THE DUTY OF EMPLOYERS. 273 

would be proportionately very much greater than if it 
were only applied to one million of laborers. 

As the economic and social benefits of an eight- 
hour and half-time system, to all classes, increase in 
proportion as its application is extended, it is clearly 
to the Interest of the employing classes to use their 
social and political influence to secure its general uni- 
form adoption. By so doing they would eliminate 
much of the class feeling from the social controversy, 
destroy the excuse for revolutionary methods, and 
help the masses to take the first step in true social 
reform, by means of which the economic condition of 
all. classes would be permanently promoted without 
injury to any. 

(2) Its adoption should be gradual. 

The charge that an abrupt reduction of three hours 
a day would be inimical to business, and hence to 
profits — at least temporarily — is the most valid of any 
objection that is urged against this measure. It is a 
well-established fact in economics that any sudden 
disturbance of industrial relations, however sound in 
principle it may be, would, for the time being, have 
an injurious effect upon business. Witness financial 
panics, sudden inflation, contraction of the cur- 
rency, etc. Some such result might be temporarily 
produced by the sudden adoption of a general eight- 
hour system. But this can easily be avoided by 
providing that it go into operation gradually — say 
half an hour a day every six months. By this means 
it would take three years to get the measure in full 
operation, during which time industrial relations 
would naturally be adjusted without serious incon- 
venience or injury to any class in the community. 



CHAPTER V. 

WHAT WOULD BE ITS EFFECT UPON RENT? 

Rent, as we have elsewhere explained, sustains 
substantially the same economic relation to wages as 
do profits.* Therefore, for all practical purposes, 
the real answer to the above question is given in the 
preceding chapter, and need detain us but a few mo- 
ments here. 

The value of land is governed by the same general 
causes as that of commodities. Consequently, rent is 
subject to the same social and economic influences as 
profits. Indeed, in the strict sense of the term, it is 
profit. For the same reason that the laborer will not 
devote his efforts to production without wages, and 
the capitalist devote his capital without profit, will no 
one pay rent for land, either for the purposes of agri- 
culture, manufacture, or commerce, unless it will reim- 
burse him for his outlay, and afford him something for 
his trouble. 

Whether land, for whatever purpose it is used, will 
do that, depends upon the social character and wealth- 
consuming capacity of the community. No matter 
how fertile, or conveniently situated for manufacturing 
or commercial purposes, land may be, it will yield 
no rent unless the results of its use or cultivation 

* For a full consideration of the question of Rent and Profits, the 
reader is referred to the next volume, where a chapter is devoted to 
each subject. 



RENT FINALLY DEPENDS ON WAGES. 275 

are demanded in sufficient quantities and at such 
prices as will pay for all the labor, risk, and enterprise 
devoted to its production. 

And this effective demand, as we have so often 
pointed out, is finally determined by the wants or 
socially accepted standard of living of the people. In 
other words, rent, like profit, primarily depends upon 
the consumption of wealth per capita of the population, 
or the real wages of the masses, actually rising and 
relatively falling as wages are increased. This explains 
why the actual rent-roll of the community increases 
as civilization advances. Nor is this inimical to the 
interests of the laborer or the community, as is so 
commonly claimed by the leading socialistic reform- 
ers and their confiding followers. 

The statement persistently proclaimed by Henry 
George, on the one hand, that a rise of rent implies a 
fall or prevents a rise of wages, and that of Karl 
Marx, on the other hand, that extreme wealth at one 
pole of society implies extreme poverty at the other, 
are both essentially false. As we explained in the last 
chapter in relation to profit, these claims would be 
true if it were a question of a mere division of a 
fixed quantity already in existence. If we were con- 
sidering the division of a given estate among a fixed 
number of people, or the apportionment of the booty 
in a community of brigands, there would be consider- 
able force to this claim, because in such cases it would 
be a mere matter of mathematics. Consequently, the 
more one portion obtained of the estate or booty, the 
less there would be for the others. Whether the wealth 
thus obtained should be wasted or wisely consumed 
would not affect the amount received, for the reason 
that it is procured by gift or plunder. This, however, 



276 WEALTH AND PROGRESS. 

could not be true in any industrial community, where 
wealth is produced as the economic consequence of 
consumption or the effectual demand, and distributed 
through the natural equity of exchange, under the free 
operation of social and economic forces. Indeed, it 
could be possible only where wealth is obtained by the 
process of taking something for nothing. We are 
often referred to the history of Rome as an illustra- 
tion of the truth of the affirmation, that the increase 
of wealth among the upper classes necessarily involves 
an increase of the poverty of the lower. Probably 
Rome is the strongest case that could be cited in sup- 
port of that position, and at first sight it seems con- 
vincing. A moment's reflection, however, will suffice 
to show that instead of sustaining the conclusion of 
either Marx or George, it affords a complete confir- 
mation of our own view. Rome was notoriously a mili- 
tary and not an industrial State. She obtained the 
bulk of her wealth not by productive industry, but 
by organized brigandage. The most pronounced trait 
in the Roman character was contempt for industry. 
Nothing could be more degrading in the eye of Roman 
society than to be engaged in an industrial or com- 
mercial pursuit.* Those who produced wealth re- 
ceived nothing but social contempt, while those who 
were most successful in confiscating the property of 
others received all the honors and emoluments of the 
state. The little wealth that was produced was wrung 
from slaves under such debasing and brutalizing con- 
ditions that they were unable to reproduce their kind 



* Augustus is said to have pronounced the sentence of death upon 
Senator Ovinius for " having so degraded himself as to engage in 
manufacture." 



ROME AN UNECONOMIC STATE. 277 

as fast as they died off, and their numbers could only 
be kept up by the enslavement of the people whose 
countries they had conquered and whose wealth they 
had confiscated. In short, Rome was economically a 
colossal highwayman, who lived mainly upon the plun- 
der and forced tribute from her neighbors. For these 
reasons, it is true that to the extent that the wealth of 
Rome was the result of military instead of industrial 
effort, the opulence of the rich did increase the poverty 
of the poor. To that extent did it tend to promote 
waste, dissipation, and social and moral degeneracy 
among the upper classes, and weakness and disloyalty 
among the lower classes. Hence, when the confisca- 
ble wealth of the neighboring countries began to di- 
minish, the fall of her power became inevitable. 

Thus, while under Rome it was to a considerable 
extent true that extreme wealth at one pole of society 
implied extreme poverty at the other, it was due to 
the fact that Rome was a military instead of an in- 
dustrial society, because she obtained her wealth by 
plunder instead of by production. Consequently, its 
distribution was not the result of the free operation 
of social and economic forces, but of arbitrary ap- 
portionment by authority, which is just what state 
socialists are demanding to-day. Economically, Rome 
may be said to have had very little in common with 
modern society. Therefore, instead of che history of 
Rome serving as an illustration of the necessary con- 
sequence of present industrial tendencies, it much 
more correctly foreshadows what might naturally be 
expected from the arbitrary inauguration of state 
socialism. 

In fact, the assumption that the increase of the 
wealth of the modern capitalist is tending to produce 



278 WEALTH AND PROGRESS. ' 

the same economic and social results as did that of the 
Roman patrician, implies the inability to distinguish 
between the effects of arbitrary division and that of 
economic law, the social influences of which are as 
opposite as those of industry and piracy. 

The fact that the aggregate rent-roll of a country is 
increasing does not necessarily imply that the wages 
and profit rolls are diminishing, nor even that their 
increase is lessened on that account. But, on the con- 
trary, in an industrial community an increase in the 
aggregate rent-roll always implies an increase in that 
of wages and profits also. 

Economically, rent can no more precede profits than 
profits can precede wages. For the same reason that 
the laborer cannot continuously devote his effort to 
any purpose which will not yield him a living (wages), 
will the enterpriser or capitalist refuse to pay rent for 
land, the use of which will not yield a profit, or, at 
least, secure him against the ordinary risks of losing 
his capital. 

It follows, therefore, that a permanent increase in 
the aggregate rents of a community is impossible with- 
out a previous increase in the aggregate profits. An 
increase in the aggregate profits is equally impossible 
without an extension of the general market, which, 
in turn, depends upon an increase in the general con- 
sumption by the masses. Moreover, the socially 
accepted standard of living, which constitutes the bed- 
rock of the general rate of wages, being an insepara- 
ble part of the civilization of the community, cannot 
be lowered without a disruption of society. Indeed, a 
general permanent reduction of real wages is an eco- 
nomic impossibility. Therefore, an increase in the 
aggregate rents of a community is impossible with- 



A RISE OF RENT IMPLIES A RISE OF WAGES. 279 

out an increase in the aggregate production of 
wealth. 

Thus, from whatever point we approach this subject, 
we are forced to the conclusion that the actual increase 
of rents is only compatible with higher wages — i.e., 
the increase in the economic ability of the masses to 
consume wealth. Hence, instead of the general rise 
of real wages being inimical to the interests of the 
rent-receiving classes, it is the only means by which 
their aggregate incomes can be increased with safety 
to themselves and advantage to the community. 

Again, the principle that economic law always oper- 
ates to the ultimate advantage of the great mass, and 
not to that of a small class of the community, is just 
as true of rents as it is of profits. The actual increase 
in the aggregate rent-roll, arising from the causes to 
which we have referred, takes a constantly diminishing 
per cent of the total wealth produced. Thus, while 
rents absolutely rise, they relatively fall with the in- 
creased consumption of wealth (real wages), because 
the aggregate products are increased in a much greater 
ratio. 

The truth of this is demonstrated in the history of 
every industrial community in the world. The merely 
nominal rent of the country merchant or manufacturer 
takes a much larger percentage out of his small busi- 
ness than does the apparently fabulous rents paid in 
New York City. The simple reason for this is that the 
latter, being in close proximity to a much larger con- 
sumption, does a larger business per dollar invested 
than the former. This explains why nearly all manu- 
factured products are cheaper in the city, where the 
rents are actually the highest, than in the country, 
where they are the lowest. In other words, the rents 



280 WEALTH AND PROGRESS. 

which are actually the highest are relatively the low- 
est — i.e., they take the smallest per cent of the wealth 
of those who pay them. 

If we compare the aggregate product per capita of 
the population with that of the rent-roll at different 
periods in any industrial community, the operation of 
this law will at once be manifest. There is, perhaps, 
no country where the question of rent has been so 
widely discussed and where the income of the land- 
owner has been regarded so inimical to industrial and 
social progress as in England ; and there is, outside of 
the United States, certainly no country where real 
wages and the aggregate production of wealth have 
increased to so great an extent. Indeed, it is to that 
country, above all others, to which Mr. George most 
delights to refer as especially illustrating the truth of 
his often-repeated but most fallacious statement, that 
rent swallows up the whole gain of increased produc- 
tive power, and, consequently, poverty and pauperism 
increase with progress.* Now, if we compare the 
rent-roll with the aggregate wealth produced in that 
country at different periods during the last two hun- 
dred years, we shall find that it completely illustrates 
the operation of the law we have laid down. 

Just before the close of the seventeenth century, ac- 
cording to the best authorities of that period (Daven- 
ant and Gregory King), the total agricultural produce, 
including pasture and forest land, was estimated at 
twenty-one million and seventy-nine thousand pounds, 
and the total rent at nine million four hundred and 
eighty thousand pounds, f a little over forty-five per 
cent of the whole produce. 

* " Progress and Poverty," pp. n, 12, 162, 163. 
f Davenant's Works, Vol. IV., p. 70. 



THE MO VEMEN T OF RENT. 2 8 1 

About a century later (1779), according to Arthur 
Young,* the total produce was estimated at seventy- 
two million eight hundred and twenty-six thousand 
eight hundred and twenty-seven pounds, and the gross 
rental at nineteen million two hundred thousand 
pounds, or about twenty-six and one half per cent of 
the produce. 

Sixty-three years later (1842-43), McCulloch f esti- 
mated the total produce at one hundred and forty-one 
million six hundred and six thousand eight hundred 
and fifty-seven pounds, and the total rent-roll at thirty- 
seven million seven hundred and ninety-five thousand 
nine hundred and five pounds, or twenty-five and one 
tenth per cent of the whole produce. And in 1880, 
thirty-eight years later, Mulhall estimated the total 
agricultural produce at two hundred and seventy mill- 
ion pounds, and the aggregate rental at fifty-eight 
million pounds, or a little less than twenty-two per 
cent of the whole. Thus, while the rent-roll has in- 
creased six hundred per cent, the product from which 
it is paid has increased twelve hundred and fifty per 
cent. In other words, the proportion of the total 
agricultural produce paid in rent has diminished during 
the last two hundred years from forty-five to twenty- 
two per cent, or over one half. 

If we include the land used for manufacturing and 
commercial purposes, which pays the highest of actual 
rents, we shall find the same law holds true. Accord- 
ing to authorities already referred to, at the close of 
the Revolution (1689) the annual produce of all kinds 
was put down in round numbers at forty-three million 



* " Political Arithmetic" (1779), P art J I-> PP- 2 7 _ 3 T - 

f " Statistical Account of the British Empire," 3d ed., p. 553. 



282 WEALTH AND PROGRESS. 

pounds, and the total rent-roll at ten million pounds,* 
or a little over twenty-three per cent of the whole prod- 
uce of the country. In 1882 the total produce was 
estimated at one billion two hundred million pounds, f 
and the total rental at one hundred and thirty-one 
million four hundred and six-eight thousand two hun- 
dred and eighty-eight pounds, or about eleven and 
ninety-five one hundredths per cent of the whole prod- 
uct of the country. 

Thus, while the aggregate rental has increased about 
thirteen hundred per cent, the total product has in- 
creased within a fraction of twenty-eight hundred per 
cent. In other words, while rents have absolutely in- 
creased over thirteenfold, they have fallen about fifty- 
five per cent relatively to the wealth produced. 

From this it is evident that in proportion as the 
standard of living of the masses has risen — the gen- 
eral consumption and consequent production of wealth 
increased — the land-owning, like the profit-receiving 
class, has become actually richer, but, at the same 
time, it obtains a smaller per cent of the total wealth 
produced. This being true, it follows that the eco- 
nomic effect of the rise of wages, which we have seen 
would result from the general adoption of an eight- 
hour system, is positively favorable to the interests of 
both the profit and rent-receiving classes. 

From whatever point of view the proposition for a 
general reduction of the hours of labor is considered, 
it will be seen that its economic effect is to promote 
the industrial progress, not merely of the laboring 

* Davenant's Works, Vol. IV., p. 71. 

f This estimate was based upon Mulhall's figures for 18S0, which 
put the total product at one billion one hundred and fifty-six million 
pounds. — "Balance Sheet of the World" p. 33. 



RISE OF WAGES NOT INIMICAL TO RENT. 283 

class, but of the whole community. Indeed, were it 
otherwise, it would not be a real reform. There can 
be no permanent improvement in the economic and 
social condition of any one class which is obtained at 
the expense of another. That is why true social im- 
provement can never be promoted by any method of 
redistribution of existing wealth, however well in- 
tended or seemingly equitably apportioned it may be. 
Redistribution is necessarily arbitrary, wasteful, and 
unjust. In fact, it is one of the best-established prin- 
ciples in economic science that wealth can never be 
economically, and, therefore, equitably and wisely dis- 
tributed, except in the natural process of its production. 
It is equally true that no progress can be real and per- 
manent which does not tend to ultimately improve the 
condition of all the economic elements in the com- 
munity ; and this obviously necessitates an increase in 
the aggregate quantity of wealth produced. 

There are two conditions essential to any proposi- 
tion for the promotion of the industrial and social wel- 
fare of the masses : (1) That it must operate upon and 
through the subtle and unconscious influences of eco- 
nomic law ; and (2) That it must automatically tend to 
increase the total production of wealth. Unlike all 
propositions for the arbitrary manipulation of indus- 
trial interests, the measure we have proposed com- 
pletely conforms to both of these conditions. It 
involves no arbitrary disturbance of any socially 
recognized vested interests, nor would it precipitate 
any sudden change in the prevailing industrial and 
social institutions. It is directed to and relies wholly 
upon the automatic but unrestricted operation of eco- 
nomic and social forces. All that it asks is that the 
laborer shall have a little more leisure time, by means 



284 WEALTH AND PROGRESS. 

of which, as we have shown, he not only could, but 
necessarily would, gradually be brought into more fre- 
quent contact with an increasing variety of social in- 
fluences. The natural, and therefore necessary, ten- 
dency of this would be to eliminate enforced idle- 
ness and able-bodied pauperism — the gradual but 
general development of the wants and standard of liv- 
ing of the masses — the increased consumption of 
wealth, and, consequently, the use of improved ma- 
chinery — the use of large capitals and the larger ag- 
gregate production of wealth, yielding higher wages 
to the laborer and lower prices to the consumer — a 
larger aggregate but smaller rate of profit to the 
capitalist and rent to the landowner — thus naturally 
improving the economic condition of all classes in the 
community without injuring that of any. 



CHAPTER VI. 

THE FEASIBILITY OF SHORT-HOUR LEGISLATION. 

SECTION I. — History of Factory Legislation in England 
from 1800 to 1840. 

AFTER all, the question of adopting an eight-hour 
system must turn largely upon its feasibility. Its 
economic and social advantages previously pointed 
out being conceded, if the obstacles to its practical 
application were such as to ultimately neutralize its 
benefits, as its opponents would fain have us believe, 
its importance as a measure of social reform would 
be destroyed. Fortunately, however, the answer of 
experience confirms in full its feasible character. 
A uniform reduction of the hours of labor, the regu- 
lation of the labor and education of working chil- 
dren, and the sanitary and other conditions of mines, 
factories, and workshops, is not an untried experiment. 
This system does not introduce any new principle 
into society, but it is only the scientific application of 
one which, though never understood, experience has 
demonstrated to be indispensable to social progress. 
It has been adopted more or less extensively in dif- 
ferent countries, and wherever its application has 
been sufficiently general to exercise any appreciable 
economic or social influence, the effect has always 
been of the most encouraging character. 

A ten-hour law, with half-time schools for working 



286 WEALTH AND PROGRESS. 

children, has been in operation to a limited extent in 
England for forty years, and, without half-time schools, 
for thirteen years in Massachusetts. Although in both 
countries it was adopted for humanitarian and not for 
economic reasons, despite the pessimistic prophecies 
of its enemies, after having been tried for nearly half 
a century in the former and more than a decade in 
the latter, its beneficial effect upon the material, edu- 
cational, and social conditions of the masses is unquali- 
fiedly attested to in the official public documents of 
both countries. Indeed, it is the only kind of indus- 
trial legislation that has ever stood the test of experi- 
ence. Wherever it has been adopted, to any consider- 
able extent, its success has more than sustained the 
claims of its most sanguine friends. Its good effect 
has not only completely answered the objections and 
exploded the false predictions of its enemies, but in 
many cases it has converted them into its ardent 
friends. 

England was the cradle of the factory system. It 
was there that the spinning-jenny, the spinning-frame, 
the power-loom, and the steam-engine were brought 
into existence. It was there that machinery was first 
brought into general use, and the division of labor be- 
came possible. It was also there that the political 
economy originated out of which grew the blind in- 
dustrial policy of sacrificing human beings to produce 
and save wealth, instead of using wealth to save and 
improve human beings. Hence, it was naturally there 
that the evils growing out of the excessive toil of 
women and children in the polluting atmosphere of 
the factory and workshop first forced themselves upon 
the attention of statesmen. 

In the name of humanity and decency, legislation 



FACTORY OPERATIVES' CONDITION IN 1800. 287 

upon the hours of labor began to be demanded at the 
very commencement of the present century — indeed, 
as soon as the factory system had become fairly organ- 
ized. At that time (1800) before any legislation re- 
ducing the hours of labor, providing half-time schools 
for working children, or in any other way increasing 
the social opportunities of the masses had been 
adopted, the social condition of the factory operatives 
in the north of England was very little, if any, better 
than that of the agricultural laborers of the south.* 

The conditions under which the factory population 
in England at that time lived and labored was such 
that I have no power to adequately describe it. In 
the earlier years of the factory system, before steam- 
power was much used, factories were driven by water, 
and had, therefore, to be located on the banks of 
streams, mostly in the country. The inventions of 
Hargreaves and Arkwright made it possible to employ 
a large number of children and women in productive 
industries. The opposition of the spinners and hand- 
loom weavers to the use of the new machines, which 
they regarded as their deadly enemy, was such that 
for a time it was difficult to obtain a sufficient number 
of children, minors, and women to run the machines, 
especially as the factories were, for the most part, 
located in sparsely-populated districts. Accordingly, 
the apprentice system, which had been in vogue since 
the early days of Elizabeth, in all the branches of 
artisan labor, was applied to the factory operatives. 

Under these circumstances, in order to keep down 



* Rogers thinks the condition of the factory operative was even 
worse than that of the agricultural laborer at that time. See " Work 
and Wages." p. 495. 



288 WEALTH AND PROGRESS. 

the "poor rates," the inmates of the poor-houses were 
forced into the factories. The poor-law authorities 
transferred (practically sold) pauper children to distant 
manufacturers, whose only responsibility was to fur- 
nish such food, clothing, and shelter as was indis- 
pensable to keep them in working condition. 

With this almost absolute power over the laborers, 
the manufacturers were enabled to compel the oper- 
atives to work under whatever conditions and as many 
hours as they chose, without let or hindrance. Ac- 
cording to the testimony taken before Parliamentary 
committees, and from other official statements upon 
the subject at that time, women and children, from 
seven years of age and upward, were compelled to 
work under the most unwholesome and immoral con- 
ditions from fourteen to sixteen hours a day, and in 
some cases more, often forcing the children to work 
part of the day on Sunday.* The debasing conse- 
quence of these conditions was such that, in 1802, Sir 
Robert Peel, who was one of the largest cotton manu- 
facturers in England, introduced a bill into Parliament 
reducing the time of labor for apprentices in factories 
to twelve hours per day. This bill, which was regarded 
as very radical, if not revolutionary, provided : (i) 
For the washing and ventilation of factories. (2) For 
the proper clothing of the apprentices. (3) For the 



* " Every Sunday children are employed in cleaning the machinery. 
Their orders are to work from six to twelve at noon. I have 
known children to work for three weeks together from five in the 
morning till nine or ten o'clock at night, with the exception of one 
hour for meals. I have frequently found the children asleep on the 
mill floor." — Testimony of John Moss, a manager of mill apprentices at 
Backbarrow, before Sir Robert Peel's Committee, 1816. See Grant's 
" History of Factory Legislation in England," p. 10. 



THE FACTORY LAW OF 1802. 289 

limitation of their labor to twelve hours per day. (4) 
For the instruction of apprentices in reading and writ- 
ing during the first four years of their apprenticeship. 
(5) For the separation of the sexes. (6) For Sunday 
instruction for apprentices and attendance at divine 
service. iff) For justices at quarter sessions to appoint 
persons to visit such factories. This bill became a 
law, and, although its provisions relating to the sani- 
tary condition of the factories, the education of the 
apprentices, etc., were never enforced, it accomplished 
one important result : it practically reduced the 
working time of the operatives about two hours a 
day, and greatly reduced, if it did not abolish, Sunday 
and night work for women and children. 

Simple and limited as this law was, its beneficial 
effect upon the operatives soon became apparent, as 
the testimony of physicians, overseers, and others 
before Parliamentary committees conclusively show.* 

This kind of legislation at that time, as it has ever 
since, met with the bitterest opposition from the manu- 
facturing and employing classes. Consequently, every 
opportunity was taken to defeat or evade it. A few 
years after the passage of this law a circumstance oc- 
curred which greatly favored the designs of the manu- 
facturers to escape from what they regarded as the 

* " Having the assistance of Dr. Percival and other eminent medical 
gentlemen of Manchester, together with some distinguished characters 
both in and out of Parliament, I brought in a bill in the forty-second 
year of the king (1802) for the regulation of factories containing such 
parish apprentices. The hours of work allowed by that bill being 
fewer in number than those formerly practised, a visible improve- 
ment in the health and general appearance of the children soon be- 
came evident, and since the complete operation of the act contagious 
disorders have rarely occurred." — Speech of Sir Robert Peel before the 
Committee of the House of Commons, May 21, 1816. 
14 



290 WEALTH AND PROGRESS. 

terrible hardships this legislation imposed upon them. 
The improvement of the steam-engine by James Watt, 
which had adapted it to the production of rotary 
motion, and its application to the driving of the new 
machines, including the power-loom, finally became 
practicable in 1806, and relieved the manufacturer from 
his dependence upon the water-wheel and the country 
stream for his motive power. 

With this improvement in motive power, it became 
possible for the first time to build factories in the midst 
of populous towns and drive them by steam. The 
factory was thus brought to the door of the mass of 
the laboring population. It now became possible for 
children to work in the factories and live at home 
with their parents, and thereby avoid the necessity, 
and with it the hardships, of the apprenticeship sys- 
tem. Much as the manufacturers wanted the absolute 
control over the children which that system gave 
them, they had a still stronger desire to get from under 
the jurisdiction of the law, which prevented them from 
working children more than twelve hours a day, and 
prohibited their employment nights and Sundays. 
Accordingly, as the factory system extended — and it 
grew very rapidly at this period — the factories became 
centred mainly in the large towns. 

By this means the employers were enabled to obtain 
the labor of children without apprenticeship con- 
ditions. They could also procure a larger number of 
them than were to be had in the rural districts. Thus 
the master succeeded in getting entirely outside the 
purview of the factory law, at the same time avoiding 
all responsibility for the food, clothing, shelter, 
health, and education of the working children. The 
consequence was that, with something of the zest that 



THE EVASION OF THE LAW, 291 

the cannibal devours the flesh of his fellow-man, the 
manufacturers returned to the long-hour, Sunday, and 
night work system, with all its barbarities.* 

Fortunately, however, sufficient time had elapsed 
before the return to the old system could become 
general to enable the advantages of the reduced 
hours to be established beyond doubt. This was clear 
to all except the manufacturers, who, like their breth- 
ren of to-day, erroneously believed their interests to be 
on the side of long hours and oppressive conditions 
for the laborers. 

The employers had now escaped even the little re- 
sponsibility for the life and physical condition of the 
children imposed by the apprentice system. A few 
years of real laissez /aire, however, was sufficient to 
demonstrate the evils of the unlimited-hour system. 

For the same reason that to be remanded back into 
slavery is more galling than to never have been free, 
to return to the unlimited-hour system, after having 
had a taste of the advantages of a short-hour factory 
law, seemed even worse than the old regime. The 
greater speed of the steam machinery became an in- 
creased tax upon the energies of the operatives. 
The effect upon the physical condition, to say noth- 

* " Large buildings are now erected, not only, as formerly, on the 
banks of streams, but in the midst of populous towns, and, instead of 
parish apprentices being sought after, the children of the surrounding 
poor are preferred, whose masters, being free from the operation of 
the former act of Parliament, are subjected to no limitation of time in 
the prosecution of their business, though children are frequently ad- 
mitted there to work thirteen to fourteen hours per day at the tender 
age of seven years, and even in some cases still younger. I need 
not ask the committee to give an opinion of the consequences of such 
a baneful practice upon the health and well-being of these little crea- 
tures." — Speech of Sir Robert Peel before Parliamentary Committee, 1816. 



292 WEALTH AND PROGRESS. 

ing of the moral and social state of the operatives, 
especially the children and women, was such as to 
challenge the attention and enlist the sympathy of the 
most indifferent classes. Despite the fact that Eng- 
land was then engaged in a deadly war with Napoleon, 
upon the result of which the fate of civilization itself 
seemed to hang, the cries of the factory children were 
distinctly heard, and the demand for a reduction of 
the hours of labor for women and children again forced 
itself upon the attention of statesmen. 

Accordingly, in 1815, Sir Robert Peel again came to 
the front as the champion of short-hour legislation. 
In that year he introduced into the House of Com- 
mons a motion for the appointment of a committee to 
" inquire into the expediency of applying the appren- 
ticeship act to children of every description." This 
committee continued to take evidence upon the sub- 
ject for three years, the result of which may be found 
in the reports of Parliamentary proceedings for 18 16, 
1 8 17, and 18 18. The effect was that, in 18 19, a law 
was passed extending the provisions of the apprentice- 
ship act (of 1802), not only to all children employed 
in cotton factories, but also prohibiting the employ- 
ment of children altogether under nine years of age, 
and limiting the labor of all under sixteen to twelve 
hours a day, or seventy-two hours a week, exclusive 
of meals. 

The beneficial effect of this measure upon the 
operatives soon became so manifest that it greatly 
strengthened the efforts of its friends, and modified 
the opposition of its enemies.* This was clearly 



* " Meagre as were its provisions, there was soon a sensible improve- 
ment in the health and appearance of the children, and both masieis 



THE TWELVE-HOUR LAW OF 1819. 293 

shown by the fact that after passing four amendments 
to this act, in order to make it more valid and effective 
in its operations, in 1825 another law was passed still 
further reducing the hours of labor. 

The measure, which was known as " Sir John Hob- 
house's bill," reduced the working time of the oper- 
atives from twelve to eleven and one half hours a day, 
or to sixty-nine instead of seventy-two per week. 
The constant improvement in the laborer's condition 
and the absence of injury to the capitalists which 
accompanied this legislation was so marked that al- 
though, with a few exceptions, it was bitterly opposed 
by the political economists and manufacturers, it 
steadily grew .in public favor. Encouraged by this 
fact, the friends of reform began to renew their efforts 
for a more extensive application of this legislation. 
Accordingly, in 1829, the work was vigorously taken 
up by the Manchester " Short-time Committee." 
Such was the popular response to the work of the 
committee, that in 1 S3 1 Sir John C. Hobhouse in- 
troduced a measure embodying their claims, which 
was seconded by Lord Morpeth. This bill proposed : 
(1) That the hours of labor should be reduced to 
eleven per day, or sixty-six per week. (2) That it 
should include all minors under eighteen years of age, 
instead of sixteen, as formerly. (3) That night-work 
should be abolished for women and all persons under 
twenty-one years of age ; and (4) That its operation, 
together with that of all previous factory legislation, 
should be extended to woollen, worsted, linen, and 
silk, as well as cotton factories. 



and men became more reconciled to factory legislation." — Grant's 
" History of Factory Legislation in England" p. 14. 



294 WEALTH AND PROGRESS. 

This raised a degree of opposition among the 
woollen, linen, and silk manufacturers hitherto un- 
precedented. They organized, held public meetings, 
and drew up a series of fourteen resolutions appeal- 
ing to the public, and Parliament in particular, to 
save them from the calamities which would befall 
them and the whole industrial community if this 
measure should become a law. They dolefully set 
forth, as they do now, that to lessen the hours of labor 
would reduce the wages and increase the hardships of 
the poor. They also predicted that it would raise the 
price and diminish the sale of manufactured products, 
thereby destroying the profits of the manufacturers 
and driving capital from the country, the result of 
which would be to afflict the people with all the ills 
in the calendar of industrial calamities.'" The conse- 
quence was that they succeeded in defeating that clause 
of the bill which extended its application to woollen, 
linen, silk, and other industries. 

This was a serious blow to the measure, but it still 
reduced the working time in the cotton industry from 
eleven and one half to eleven hours per day, and was ap- 
plied to all under eighteen instead of sixteen years of 
age, and also prohibited night-work for all under 
twenty-one years of age. 

Having secured this much, the friends of reform de- 
cided to make another effort to obtain the lost portion 
of their measure. The benefit of each instalment of 
social opportunity thus acquired was so manifest in 
the improved condition of the operatives, that it 
steadily gained in its hold upon the sympathy and 



* See Grant's " History of Factory Legislation," pp. 22, 23, 24, 
25, 26. 



THE CHILD LABOR LA W OF 1833. 295 

support of the public. The movement had now 
reached the point where it had the endorsement and 
active support of several prominent persons among 
the wealthy classes, foremost among whom was Lord 
Ashley (afterward Earl Shaftesbury). 

In 1833 Lord Ashley introduced a bill to reduce 
the hours of labor for women and minors in manufac- 
turing establishments to ten per day. In order to 
avoid the passage of what they regarded as a radical 
and dangerous measure, the Government promised a 
bill dealing with the whole subject, The result was 
that Lord Althorpe, then Prime Minister, finally in- 
troduced a bill reducing the hours of labor for children 
to eight per day, with two hours' schooling each day. 
This act also provided that its own provisions and 
those of all previous factory acts should be applied to 
all textile industries except silk, and accomplished 
the object of Mr. Hobhouse's act, which the manu- 
facturers defeated two years before. This was a 
greater step forward in short-hour legislation than its 
friends were then prepared to admit. While it did 
not make a very material reduction in the working 
time of operatives in cotton factories, its extension to 
the woollen, worsted, and flax mills greatly increased 
the number of operatives to whom this legislation ap- 
plied. Thus to a very large number of workers it 
was a reduction of working time two hours a day. 
The extent to which such legislation is applied is often 
more important than the degree in which the hours 
are reduced. 

The fact, however, that the last-named act reduced 
the working time of the children to eight hours a 
day, while all the others were working eleven, created 
a disproportion in the working time, which was very 



296 WEALTH AND PROGRESS. 

inconvenient to the manufacturers. This was made a 
pretext on the part of the employers for the starting 
of a movement to repeal the law. 

Meantime, however, a very much larger portion of 
the laboring people had begun to receive the actual 
benefits of the reduced hours of labor, and the good 
effects of the law were so obvious as to be admitted 
by all classes in the community, except manufacturers 
and political economists, who were never-failing in 
their opposition. 

Accordingly, the mere mention of an attempt to 
repeal the law was the signal for a simultaneous out- 
burst of indignation throughout the manufacturing dis- 
tricts. Instead of consenting to a plan for equalizing 
the hours of labor by increasing those of the children, 
as demanded by the manufacturers, the operatives 
proposed to accomplish that result by reducing the 
hours of the adults. 

Two opposite movements were now set on foot, one 
for the repeal of the law reducing the working hours 
of children, and the other to extend it. The former 
was supported by the wealth, intelligence, and social 
influence of the manufacturers, and the latter by the 
zeal and earnestness of the factory operatives, led by 
Lord Ashley and a few men of means and character 
in Lancashire and Yorkshire. The community con- 
stituted the jury to which the case was submitted. 
The masters' side consisted mainly in prophesying 
that industrial depression, poverty, social degradation, 
and national dishonor would speedily befall the coun- 
try if the children were not permitted to work eleven 
hours a day. On the other hand, the operatives 
pointed to the results of factory legislation in the past. 
They triumphantly referred to the fact that each re- 



VICTORY FOR THE OPERATIVES IN 1839. 297 

d action of the hours of labor, even when it was con- 
fined to cotton factories, was followed with marked 
benefits to the operatives and without injuring the 
employers. When it was extended to the woollen, 
flax, and other industries, the benefits were even more 
than proportionately greater. Thus, while the claims 
of the advocates of short-hour legislation had been 
approximately sustained in every instance, the evil 
prophecies of their opponents had as frequently proved 
to be nothing but the ghosts of their short-sighted and 
selfish fears. 

As the agitation progressed, the cause of the opera- 
tives gained power in Parliament and popularity in the 
country. In 1839 Lord Ashley, as the leader of the 
people's cause in Parliament, introduced a bill extend- 
ing the Factory Acts to silk mills, which had hitherto 
been exempt. After a protracted debate, the Govern- 
ment, which had always stood for the employers, was 
beaten by a majority of eleven. 



SECTION II. — History of the Half-Time Law of 1844 
and the Ten-Hour Lazv of 1847. 

In 1840 Lord Ashley introduced a motion to ap- 
point a committee to investigate the condition and 
the employment of children in coal and iron mines, 
foundries, brick-yards, and other industries not affected 
by the Factory Acts, with the view of bringing them 
under the influence of such legislation, which was also 
adopted. 

From this and other similar experiences, it became 
clear to the leaders of the " masters' " movement that 
the opinion of the jury, both in and out of Parliament, 



298 WEALTH AND PROGRESS. 

was steadily tending toward the side of the operatives, 
and that unless the case was brought to an early close 
the verdict would be to grant their whole claim. 

In order to prevent this result, an effort was made to 
check the operatives' movement by depriving it of its 
most powerful leaders. To this end, in 1841, Sir 
Robert Peel, son of the author of the first factory bill, 
offered Lord Ashley a seat in the cabinet, that being 
regarded as the most effectual mode of disposing of a 
powerful antagonist. His lordship, however, true to 
the cause he had espoused, would accept it only on 
condition that the Government would introduce his 
Ten-Hour Bill. This being the very thing his entrance 
into the cabinet was intended to avoid, this offer was, 
of course, declined, and his lordship refused the office 
and its honors, and continued his work as a commoner 
on the floor. 

It now became clear that the only way to avoid the 
granting of the whole of the operatives' demands, and 
pass a ten-hour law, was to offer a compromise. Ac- 
cordingly, in 1843, Sir James Graham, then Home 
Secretary, promised that if Lord Ashley would desist 
in pressing his bill, the Government would introduce 
a measure dealing with the subject. 

After several postponements and delays, on the 6th 
of February, 1843, Sir James Graham introduced a 
bill reducing the working hours of women, which had 
hitherto, like those of men, been unlimited, to eleven 
per day. It also reduced the working time of children 
from eight hours a day to half time, compelling attend- 
ance at school the other half. The objections raised 
to the previous law — that making irregular working 
hours disturbed the business — were entirely obviated 
by the provisions of this act. 



THE HALF-TIME BILL INTRODUCED IN 1843. 299 

Reducing the working hours of children to half 
time, and prohibiting the employment of a child any 
portion of both forenoon and afternoon in the same 
day, reduced the employment of children to a simple 
and uniform basis. All that was necessary, in order to 
have the time fully occupied, was to employ two sets 
of children, one to work in the forenoon and the 
other in the afternoon— each attending school the 
alternate half day. 

This measure contained two elements which tended 
to make its operation smooth and automatic : (1) The 
attendance of the children at school being made an 
indispensable condition of their employment, tended 
to secure the aid of parents to enforce the school law. 
Even those parents who were the most ignorant and 
indifferent to the education of their children now 
became very eager to keep them constant in their 
school attendance, because it was the only means of 
securing their meagre earnings. (2) Two children 
being employed, each to work half of the time, no 
child could be employed a whole day without de- 
priving another of half a day's employment. To do 
this would inflict the loss of half a day's wages upon 
the other child, which would be vigorously resisted. 
The violation of the law would thus be exposed, 
and, indeed, made practically impossible, by the self- 
interest of the operatives themselves. In other words, 
its operation was substantially automatic. These feat- 
ures, together with the fact that the law applied to 
children in all the leading industries, outside of agricul- 
ture, made this the most important labor measure that 
had ever been adopted. It provided a greater degree 
of social opportunity for the masses than the world 
had ever before seen. From this time every work- 



3°o WEALTH AND PROGRESS. 

ing child in England was spending as much time in 
school as in the workshop. In this way over-cramming 
in the former and overwork in the latter were safely- 
guarded against. 

The foundation for a degree of intellectual and 
social development among the masses was thus laid 
that had never before been dreamed of. It is from 
the passage of this law that the educational and social 
progress of the English laboring classes really dates. 
The extraordinary benefits this measure conferred 
upon the children soon conclusively established the 
economic and social expediency of short-hour legisla- 
tion. Accordingly, instead of serving as a compromise 
to head off Lord Ashley's ten-hour bill, as the Gov- 
ernment had supposed, this law had the opposite 
effect, and made its long delay an impossibility. 

Having secured this great boon for the children, the 
efforts to obtain a ten-hour law, at least for women 
and minors under eighteen years of age, were now 
redoubled. The manufacturers had grown more and 
more bitter and vindictive in their opposition. In 
their almost fanatical enthusiasm for the repeal of the 
corn laws — the agitation for which was then at its 
height — they made great pretence of sympathy for the 
hardships of the poor ; yet they sneered at, ridiculed, 
and often personally abused all who favored the de- 
mand of the operatives for a ten-hour law.* 

* The extent to which this bitter opposition was carried is shown 
by the fact that even John Bright, the Quaker and much-lauded re- 
former, was so unrelenting in his opposition to the ten-hour bill (he 
was a large manufacturer), and became so personally abusive in his 
attacks on Lord Ashley (whose motives and character were always 
above suspicion) for his advocacy of that measure, that in the House 
of Commons he was compelled to publicly apologize for his ungentle- 
manly conduct. See Grant's " History of Factory Legislation," p. 75. 



BITTER OPPOSITION OF JOHN BRIGHT. 301 

The manufacturers and free-traders generally, led 
by Cobden, Bright, Roebuck, and others, backed by 
all the prominent political economists, who were ad- 
vocating cheap bread that they might obtain cheap 
labor, again indulged in their doleful predictions of 
the calamities that would befall the laborers and the 
community if this bill became a law. If that measure 
were passed capital would leave the country, manu- 
factures would decline, England's power and prosper- 
ity at home and her influence abroad would diminish, 
and she would fall from her high place among nations 
to that of a third or fifth-rate power in Europe. In 
short, all the evil prophecies which had been repeated 
on every occasion since 1802 — not one of which had 
been fulfilled — were again proclaimed with as much 
vigor as if they involved a new discovery or a special 
message of warning from heaven. Professor Senior's 
argument — which was invented to defeat the exten- 
sion of the elder Sir Robert Peel's apprentice law to 
factory children in 18 19 — " That all the profit of the 
manufacturer was made in the last hour," which if 
taken off would ruin him' — was urged with increased 
vigor and emphasis.* 

Fortunately, however, the result of the various 
reductions in the working time during the previous 
twenty years was such that the operatives and their 
friends had good reason to remember it, as Lord Ash- 
ley in his speech (1845) conclusively showed. In this 
speech, which was, in many respects, one of the most 
remarkable orations ever delivered in Parliament, his 
lordship, by data obtained from manufacturers' books, 
pay-rolls, and other authentic sources, exposed the 

* See Hansard's " Parliamentary Debates," 1S42-47. 



302 WEALTH AND PROGRESS. 

fallacies of these sham prophecies. He proved that 
wages had not fallen, profits had not been lessened, 
production had not been diminished, and business 
prosperity had not been injured. On the contrary, 
he showed that wages had advanced, profits had risen, 
prices fallen, and production greatly increased ; and, 
instead of capital leaving the country, " we see gentle- 
men, brokers, merchants, doctors, lawyers, drapers, 
tailors, etc., leaving their respective professions and 
trades, and see them building mills in almost every 
town in Lancashire." Referring to the Senior " last- 
hour'' subterfuge, his lordship declared : ," It has al- 
ways been urged, and has never been verified, and yet 
experience should go for something in these great 
considerations. It was broached in 1816, repeated 
and enforced in evidence before committees in 
speeches and pamphlets in 1817, 18 18, and 18 19, and 
utterly refuted by the whole subsequent history of the 
cotton trade from that day to the present. You had 
no diminution of produce, no fall in wages, no rise in 
price, no closing of markets, no irresistible rivalry 
from foreign competition, although you reduced your 
hours of working from sixteen, fourteen, thirteen to 
twelve hours in the day. What change has there oc- 
curred so mighty as to prevent a similar result in 

1845?"* 

While this speech did not convert the Brights and 
Cobdens, it diminished the influence of their oratory 
in the community against the ten-hour movement. 
Although it was then defeated by a majority of sixty- 

* Hansard's "Parliamentary Debates," 1844. See also Grant's 
" History of Factory Legislation," pp. 95, q6, 97 ; Hodder's " Life 
of Earl Shaftesbury," 1886, and Edinburgh Review, April, 1887, 
p. 366. 



THE TEN-HOUR LA W ADOPTED IN 1847. 303 

two, in 1847, only two years later, and three years 
after the passage of the half-time law, it was adopted 
after seven divisions, in each of which it was carried 
by an average majority of over two to one.* 

This completed the reduction of the working time 
during the twenty-eight years (18 19 to 1847) from six- 
teen to five hours per day for children under thirteen 
years of age, and from sixteen to ten hours per day 
for women and for minors from thirteen to eighteen 
years of age. What the effect of this was upon the 
industrial and social condition of the masses we shall 
see in the next chapter. 

* Grant's " History of Factory Legislation," p. 138. 



CHAPTER VII. 

THE PHENOMENAL EFFECT OF THE TEN-HOUR LAW 
AND HALF-TIME SCHOOLS IN ENGLAND. 

Section I. — The Striking Success of these Laws Con- 
verted Sir James Graham, Mr. Roebuck and Other 
Opponents. 

The ten-hour law of 1847, which did not go into 
full operation till the first of May, 1848, was more 
complete in its construction and more extensive in its 
application than any previous legislation upon the 
subject. Factory inspectors were appointed to see to 
its enforcement, with heavy penalties for its violation. 
Hence, notwithstanding the ingenious devices of mill 
managers to evade the law, and the skill of the legal 
fraternity to wrench the virtue out of it, by strained 
interpretations in their defence, it was more literally 
and uniformly enforced than any previous act had 
been. Therefore, the effects of this law, together 
with that of 1844, for half-time schools, which have 
been in continuous operation ever since, may fairly be 
taken as the test of the economic and social tendency 
of short-hour or opportunity-creating legislation. 

The industrial histoty of England from that time to 
this conclusively shows that, instead of verifying the 
pessimistic predictions of its enemies— the Cobdens, 
Brights, and Roebucks — it more than justified the 
claims of its most ardent supporters. The working 



THE EFFECT OF INCREASED OPPORTUNITY. 305 

children in the leading productive industries were now 
for the first time receiving an education as the con- 
dition of employment. And within a single decade it 
became a rare thing to find an operative of either sex 
under twenty years of age who could not read and write. 

By this means the general intelligence of the labor- 
ing classes was rapidly developed. What the school- 
ing did for the children the increased social intercourse 
— for that, in its broadest sense, is social education — did 
for the adults. The increased leisure, with diminished 
exhaustion, increased the opportunity and inclination 
of the laborer for a greater variety of social life. 
This, in accordance with the principles we have laid 
down throughout this work, naturally tended to stim- 
ulate and enlarge his social tastes, desires and wants, 
raise his standard of living, and advance his wages. 
It also brought about, as a necessary consequence, an 
increase in the consumption and production of wealth ; 
it promoted the use of improved machinery, and thus 
reduced prices without lessening the income of the capi- 
talist, thereby advancing the material prosperity and 
also the intellectual, moral, social, and political prog- 
ress of the whole community. 

And this is what the industrial history of England 
since 1850 shows has taken place. The marked im- 
provement in the material and social condition of the 
laboring classes in all industries affected by this legis- 
lation, especially among the factory operatives, that 
immediately followed these two last-named measures 
— the half-time law of 1844 and the ten-hour law 
of 1847 — was su ch that within less than a decade and a 
half it had not only sustained the claims of its friends, 
but it had completely silenced, and, in many cases, con- 
verted its most bitter enemies into positive advocates. 



306 WEALTH AND PROGRESS. 

In 1859, eleven years after the final passage of the 
latter act, Mr. Barker, chief of the factory inspectors, 
read a paper on the condition of the factory operative 
before the Social Science Congress, held at Bradford, 
in which he said : " I have thus given you not only 
the result of my own experience, but the local testi- 
mony of gentlemen who weekly visit mills which em- 
ploy in the aggregate upwards of seventy thousand per- 
sons, of whom upwards of forty thousand are females 
and forty-five hundred are children, and who all testify 
to the same fact — viz., the almost entire disappearance 
of deformity and the non-appearance of any other 
disease specific to factory labor. And it is exceed- 
ingly gratifying to find that an experiment which had 
many opponents when it was about to be tried has 
been productive of such great benefit to the working 
classes, without, I believe, an atom of either personal, 
commercial, or national wrong. I venture to make 
this statement on three grounds : First, Because, al- 
though the hours of work have been very much di- 
minished, wageslmve increased in some cases forty per 
cent, and generally about twelve per cent, and there- 
fore the means of providing home comforts by the 
people have been multiplied. Secondly, Because it 
has not diminished any kind of textile production, and, 
therefore, it has not injured our national prosperity." 

In support of this he quoted the immense increase 
in manufactured products and commercial prosperity, 
showing that the volume of business had nearly doubled 
from 1844 to 1858, a fact which has been fully sus- 
tained by all subsequent investigations.* 

* Mulhall, in his " Progress of the World in the Nineteenth Cen- 
tury," p. 539, shows that the commerce of Great Britain not only 



MR. ROEBUCK'S CONVERSION. 307 

In support of his statement that the social condition 
of the masses had been greatly improved, he pointed 
to the great increase during the same period of schools, 
lectures, public gardens, and other sources of pleas- 
ure, " refinement, and civilization, which," he adds, 
" only take their date from the possession of the priv- 
ileges which restricted labor conferred upon the 
people." * 

In i860 a bill was introduced to extend the Factory 
Acts to print works, whereupon, on March 21, Mr. J. 
A. Roebuck, who, it will be remembered, was one 
of the bitterest antagonists the half-time and ten- 
hour bills had to encounter, rose in the House of 
Commons, publicly apologized for his opposition to 
those measures, and supported the bill. In his speech 
he said : " I am about to speak on this question under 
somewhat peculiar circumstances. Very early in my 
Parliamentary career Lord Ashley, now the Earl of 
Shaftesbury, introduced a bill of this description. I, 
being an ardent political economist, as I am now, 
opposed the measure, . . . and was very much influ- 
enced in my opposition by what the gentlemen of 
Lancashire said. They declared then that it was the 
last half hour of the work performed by their opera- 

actually doubled during that period, but that, including Ireland, it has 
doubled per capita of the population. In 1841 the commerce of Great 
Britain was six pounds and three shillings per head of the population, 
and in 1861 it was twelve pounds and ten shillings. Thus, from three 
years before the passage of the half-time act to two years after the 
time Mr. Barker made the above statement, commerce had increased 
six pounds and seven shillings per capita. In other words, the vol- 
ume of trade increased from 1841 more than twice as fast as the pop- 
ulation, while from 1801 to 1841 it had hardly kept pace with it. See 
also his " History of Prices," p. 34, London, 1885. 

* Grant's " History of Factory Legislation," pp. 148, 149, 



308 WEALTH AND PROGRESS. 

tives which made all their profits, and that if we took 
away that last half hour we should ruin the manufac- 
turers of England. I listened to that statement, and 
trembled for the manufacturers of England [a laugh] ; 
but Lord Ashley persevered. Parliament passed the 
bill which he brought in. From that time down to 
the present the factories of this country have been 
under state control, and I appeal to this House 
whether the manufacturers of England have suffered 
by this legislation. [Great cheers.] But the honor- 
able member for Manchester [John Bright] still I find 
makes the same objection. He gets up and prophesies 
all sorts of evil if we interfere now ; but he has kept 
out of view the evils for the prevention of which we 
are now about to interfere. [Cheers.] . . . But I will 
read some facts from Mr. Tremenheere's report, and 
will then appeal to the House of Commons, to the 
fathers and the brothers of English women and chil- 
dren, if they will not interfere to put down this tre- 
mendous evil. .... I, at least, will not be a party to 
the perpetration of any such atrocities as I find re- 
corded, and I do hope that the gentlemen of Eng- 
land will not be parties to them, either. . . . Hav- 
ing prevented this misery in the one case, let us 
interfere to prevent it in the other." [Great cheer- 
ing.] * 

Sir James Graham, who, it will be remembered, was 
a no less persistent opponent to short-hour legislation 
than Mr. Roebuck, on one occasion even threaten- 
ing the resignation of the ministry if Lord Ashley's 
bill was passed, at once congratulated Mr. Roebuck, 

* Hansard's " Parliamentary Debates," i860. See also Grant's 
" Historv of Factorv Legislation." nn. tjo. ico. 



History of Factory Legislation," pp. 149, 150 



SIR JAMES GRAHAM'S RECANT A TION. 309 

and said : " I am glad that you have read your recan- 
tation, and I will read mine to-morrow." * 

On the ninth of May, when the bill came up for a 
third reading, Sir James rose in his place, and said : 
" I am sorry once more to be involved in a short-time 
discussion. I have, however, a confession to make to tlie 
House. . . . Experience has shown to my satisfaction 
that many of the predictions formerly made against the 
Factory Bill have not been verified by the result, as, on 
the whole, that great measure of relief for women and 
children has contributed to the well-being and comfort 
of the working classes, while it lias not injured their 
masters. The enactment of the present bill ought to 
approach as nearly as possible the Factory Act. . . . 
By the vote I shall give to-night, I will endeavor to make 
some amends for the course I pursued in earlier life in 
opposing the Factory Bill. 

Sir Thomas Bazley, a prominent manufacturer in 
Manchester, also rose and testified to the great and 
unexpected advantages which had resulted from the 
Factory Acts. 

In a speech in the House of Commons, March 7, 
1864, Mr. Gladstone added his testimony to the vir- 
tues of this measure, and said : " You have prohibited 
by your Factory Acts the employment of children 
beyond a certain number of hours, and the employ- 
ment of young persons beyond a certain number of 
hours. . . . It may be said that the Legislature is now 
almost tinanimous with respect to the necessity which ex- 
isted for undertaking it, and zaith respect to the ben- 



* This statement of Sir James Graham's was publicly repeated by 
Mr. Roebuck in a speech in the Mechanics' Institute, Sheffield, May, 
1S64, and was reported in the London Times. 



310 WEALTH AND PROGRESS. 

eficial effect it has produced both in mitigating human 
suffering and in attaching important classes of the 
community to Parliament and the Government." 

The success of this measure was not only sufficient 
to disarm the opposition of the average editor, poli- 
tician, and manufacturer, and convert the leading 
statesmen from antagonists to advocates, but it also 
silenced the opposition of the political economists, 
and forced from the more candid of them a public en- 
dorsement of its economic and social soundness. Al- 
though every political economist in England who 
wrote before 1850 was uncompromisingly opposed to 
short-hour legislation, not one who has written since 
1865, even of the most ultra laisscz faire type, has 
ventured to announce his opposition to the Factory 
Acts. In fact, the ablest and most influential of 
them, such as Professor Newmarch, John Stuart Mill, 
Professors Rogers, Cairnes, Jevons, Mr. Thornton, 
and others, have frankly admitted the economic ex- 
pediency of these measures, while those of the more 
modern school, especially on the continent and in this 
country, who have never been committed to ultra 
laissez faire, are quite pronounced in approval of 
their economic influence. 

The social benefits arising from these measures are 
still further shown by their constantly growing popu- 
larity with all classes in the community, which is un- 
mistakably indicated by the fact that in 1850, 1853, 
1861, 1864, and 1867 measures were passed further ex- 
tending the principle of the ten-hour law of 1847 to 
other industries, and in 1874, while all her commercial 
competitors, both on the continent and in this coun- 
try, were working from eleven to fourteen hours a 
day, England, after thirty years' experience with a 



NINE AND A HALF HOURS PER DAY. 311 

half-time industrial system for children, and twenty- 
seven years with a ten-hour law for adults, further re- 
duced the working time of the operatives to nine and 
a half hours per day. 



Section II. — Social Progress Shown by the Rise of 
Wages, the Fall of Prices, and the Diminution of 
Illiteracy, Pauperism, and Crime. 

If we turn from personal testimony to the uncon- 
scious economic and social data, we shall find that the 
answer is no less emphatic and conclusive. An ex- 
amination of the economic and social condition of the 
laboring classes from 1850 to the present time will 
show that in proportion as the increased leisure and 
social opportunity consequent upon fewer hours of 
labor and half-time schools became general and per- 
manent in their influence, the social well-being of the 
masses increased. This is shown (1) By the general 
and steady rise of wages. (2) By the increased pro- 
duction of wealth per capita of the population. (3) 
By the fall in prices. (4) By the increased general 
intelligence of the masses. (5) By the decrease in 
pauperism. (6) By the diminution of crime. 

First, then, as to wages. There has never been 
anything like an approximately complete statistical 
statement of the rates of wages in the different coun- 
tries from year to year, or decade to decade. Indeed, 
we are only just beginning, even in the most civilized 
countries, to recognize the importance of industrial 
statistics. Hence, industrial data have hitherto been 
meagre and fragmentary. Instead of the rates of 
wages being uniformly taken for all industries at the 



312 WEALTH AND PROGRESS. 

same time, as we now take the census, the work has 
been undertaken in one industry or locality for some 
special purpose by a public-spirited person ; at another 
time or place by a board of trade or chamber of com- 
merce ; at another by a labor organization or scientific 
or statistical society, or at another by a parliament- 
ary committee. For this reason, while statistics 
have been taken in all industries, and are, for the 
most part, quite reliable, it is difficult to obtain them 
for all industries at any one date, especially up to 
twenty years ago. 

As wages are governed by social influences, it is safe 
to assume, except in case of some special local dis- 
turbance, which, in relation to the general rate, would 
never be more than a perturbation, that their tendency 
in those industries not recorded was the same or sim- 
ilar to that of those which were. 

I must beg the indulgence of the reader for a mo- 
ment's digression here to correct what I regard, to say 
the least, as a misleading method of using statistics, 
especially in relation to wages. It is literally true that 
" figures do not lie," yet they may be, and often are, 
so used as to warrant the statement, so often made, 
44 that nothing lies like figures. " The percentage of 
a rise or fall in the rate of wages will infallibly indicate 
the extent of the movement in either direction from a 
given point. But the same percentage of rise or fall 
in wages at different times and places will not neces- 
sarily indicate the same actual variation in each case, 
unless the point from which they moved was identical. 
For this reason, at one time and place a small actual 
rise may show a large percentage of increase, while at 
another a much larger actual rise may show a very much 
smaller percentage of increase. Whether a given ac- 



THE TRUE BASIS FOR COMPARISON. 313 

tual increase or diminution in wages will show a large 
or small percentage of rise or fall will entirely depend 
upon whether the amount at the point from which the 
variation took place is large or small. Thus, while it 
is true that a rise in real wages always indicates an im- 
provement in the social condition of the masses, the 
extent of that improvement is not always adequately 
expressed by the percentage of the rise, but it is al- 
ways infallibly indicated by the absolute amount of the 
increase. This is especially important in comparing 
the relative progress (social well-being) of the masses 
in different periods, countries, or industries. For in- 
stance, a rise of one hundred per cent in the wages in 
England in 1350 (three pence a day) would have in- 
creased the laborer's wealth less than would a rise 
of ten per cent in 1887. And for the same reason, to- 
day an increase of five per cent would give the Ameri- 
can laborer as much additional wealth as in China a 
rise of one hundred per cent would give to the Mon- 
golian. A pound of flour or a pound of beef, whether 
it represents one or fifty per cent of the laborer's 
wages, only represents the same amount of wealth or 
well-being. Social progress, therefore, actual or rela- 
tive, is more correctly expressed in the actual amount 
of increase in acquisition of wealth than in any pres- 
entation of percentages. This is an important fact 
that should never be lost sight of in wages compari- 
sons, and we shall rely upon the reader to keep it in 
mind throughout this discussion. 

To resume, then. Robert Giffen, President of the 
British Statistical Society, estimates that during the 
fifty years previous to 1883 the operatives' wages in 
woollen manufacture rose, on an average, including 
women and children, one dollar and ninety-eight cents 
*5 



314 WEALTH AND PROGRESS. 

per week, and those of artisans, two dollars and thirty- 
eight cents * per week, showing an average rise for the 
whole of two dollars and eighteen cents per week. By 
the returns of the Manchester Chamber of Commerce for 
1883, we find that the wages of the cotton operatives 
(medium quality), all departments taken together, 
from 1850 to 1883, rose two dollars and forty-eight 
cents per week. Those in fine quality of goods rose one 
dollar and fifty-two cents per week ; in bleaching, two 
dollars and twenty cents per week ; in the building 
trades, two dollars and two cents per week, and in coal- 
mining, one dollar and ninety-two cents a week. Tak- 
ing all the above industries together (and they embrace 
nearly one hundred different occupations outside of 
agriculture and the London trades), we find that from 
1850 to 1883 the wages of men, women, and children 
have, on the average, increased two dollars and ten 
cents a week.f 

The foregoing results are fully confirmed by Mul- 
hall, who shows % that during the forty years prior to 
1875 wages in England, exclusive of agriculture, rose 
on the average two dollars and sixteen cents a week. 



* This difference is partly due to the fact that there is a much larger 
number of children in the former than in the latter occupations. 

f It is not pretended that these figures are literally correct, but when 
we remember that they are drawn from nearly one hundred different 
occupations and by expert statisticians of the highest reputation, who 
have such exceptional opportunities for obtaining the necessary facts 
as are open to the President of the British Statistical Society and the 
President of the Manchester Chamber of Commerce, who had free 
access to the pay-rolls of the leading concerns throughout the country, 
they may be safely accepted as approximately correct and quite reli- 
able, and as indicating the general industrial and social conditions of 
the masses. 

% " Progress of the World," p. 142, London, 1880. 



INCREASE OF WAGES IN ENGLAND. 315 

And in a later work * he further shows that the wages 
of artisans (including London trades) and factory oper- 
atives, taken together from 1840 to 1884 (being one 
decade more than was covered by the estimates of 
Messrs. Giffen and Lord), wages rose two dollars and 
forty-nine cents per week. 

These conclusions are thoroughly sustained by the 
investigations of Leone Levi,f who by distinct and, in 
some respects, quite different means arrives at substan- 
tially the same results. He shows that the income of 
the average family among the wage classes (which, he 
says, comprise seventy per cent of the population), 
from 185 1 to 1880, increased from fifty-two pounds to 
eighty-three pounds per year, or two dollars and 
eighty-six cents a week per family. This embraces 
agricultural as well as artisan laborers in both England 
and Ireland, who have not been under the influence 
of the short-hour legislation (except as they have been 
indirectly affected by the improved social and indus- 
trial condition of artisan and operative classes in the 
towns, a fact which should not be ignored). Accord- 
ingly, the wages of agricultural laborers have only 
risen about seventy-two, or, at most, seventy-five cents 
a week. If we eliminate the agricultural laborers, who 
constitute twenty-three per cent, we find the rise, on 
the average, amounts to three dollars and thirty- 
seven cents per week per family. 

Now, the proportion of earners to families, all taken 
together, are 1.57 to 1 ; according to which Mr. Levi's 
figures show that the wages of all classes of laborers 
taken together (exclusive of agriculture), from 1851 to 



* " History of Prices," 1885, p. 125. 
\ " Wages and Earnings," London, il 



316 WEALTH AND PROGRESS. 

1880, have risen two dollars and fifteen cents per 
week, being substantially the same as given by Messrs. 
Giffen, Lord, and Mulhall.* 

From the above facts, the general consistency of 
which, without pretending to literal accuracy, is suffi- 
cient to establish their approximate correctness, it is 
quite safe to conclude that during the last thirty-five 
years the general rate of wages in all industries (out- 
side of agriculture) has actually increased from two 
dollars and ten cents to two dollars and twenty five 
cents per week, or fully fifty per cent. But not only 
have nominal wages advanced under the regime of less 
hours of labor and increased social opportunities for 
the masses (which it was confidently predicted would 
bring industrial disaster), but real wages have increased 
to a still greater extent. The English laborer now 
not only receives fully fifty per cent more money 
than he did before the passage and the adoption of 
the ten-hour and half-time system, but, through the 
fall of prices, each dollar he receives to-day will pro- 
cure him fourteen per cent more wealth than did that 
of 1850, and, leaving out house-rent, it will give him 
twenty-one per cent more. It is true that the price of 
meat and dairy products has risen during the period 
referred to, but that of wheat, clothing, furniture, 
and almost everything else has been greatly reduced. 
All investigations, without regard to the method of 



* See also the investigations of Mr. Chadwick, as published in the 
journal of the Statistical Society, Dr. Wall in the " Encyclopaedia 
Britannica," Dudley Baxter on the " National Income," Professor 
Young's "Labor in Europe and America," and Brassey's "Work 
and Wages." While these authorities deal with but a portion of 
that period, so far as they go they all sustain the conclusion given in 
the text. 



FALL IN PRICES IN ENGLAND. 317 

computation employed, establish this fact. Mulhall, 
whose investigations have probably been the most ex- 
tensive and come down to the most recent date,* 
shows that the general price level for Great Britain in 
1884 was fourteen per cent lower than that of 1850— 
i.e., what is called the " purchasing power" of money 
had increased fourteen per cent since the latter date. 

Nor can the increase in house-rent, which Mulhall 
puts at about eleven per cent of the laborer's income, 
be properly put down as a rise in the price — i.e., a rise 
in the price of houses of the same quality, which is 
what is always implied by that expression. 

While it is true that the average rent paid for houses 
by the laboring classes in England has doubled since 
1850, the quality of the average house occupied by 
that class, if not twice as good to-day, is certainly very 
much better than it was in 1850. Indeed, the kind of 
houses inhabited by a very large portion of the wage 
classes in England in 1850 are now prohibited from 
being used as human habitations at any price. Hence, 
while the laborer pays more rent to-day than he did 
in 1850, he gets a very much better house, which is 
the same as saying that he pays more money, but gets 
more wealth. 

But assuming that the increase in house-rent is all 
sheer rise of price for the same quantity and quality 
of wealth — which obviously it is not — the rise in the 
money price of labor and the fall in that of commodi- 
ties shows that real wages (the amount of wealth given 
for a day's work) in England have increased since the 
passage of the ten-hour law fully sixty-five per cent, 
or two dollars and forty cents a week. 

* " History of Prices," 1885. 



318 WEALTH AND PROGRESS. 

Now, according to the principle we have laid down 
and frequently emphasized throughout this work — ■ 
that the progress of mental and moral develop- 
ment and of social, religious, and political freedom 
are the consequence of, and therefore commensurate 
with, the permanent increase in the consumption of 
wealth per capita of the laboring population — we 
have a right to expect, with such a permanent rise in 
the general rate of real wages, to find a higher stand- 
ard of intelligence and general culture, and a greater 
degree of political power among the masses ; and a 
diminution of ignorance, pauperism, and crime in the 
community. Indeed, if the evidences of the latter were 
wanting, the genuineness of the former might well be 
doubted. Fortunately, however, the indications of 
the intellectual, moral, and political advancement of 
the English laborer during this time are no less mani- 
fest than are those of his economic improvement. 

The progress of the general intelligence of the masses 
during that period is clearly indicated by the fact that 
from 1840 (four years before the passage of the half- 
time school law) to 1870, twenty-six years after, the 
proportion of the adult population who could read and 
write increased thirty-five per cent.* In 1840 the 
number of children who attended school, both private 
and public, was nine per cent, in 1850, twelve per 
cent, and in 1877, seventeen per cent of the popula- 
tion ; and in 1840 the number of children that went 
to the public schools (which are almost exclusively 
attended by the children of the working classes) was 
only 1 in 57 of the population, and in 1877 they con- 
stituted 1 in 9 of the population. f That is to say, the 

* Mulhall's " Progress of the World," p. 167. 
f Ibid., pp. 89, 167. 



DECREASE OF CRIME SINCE 1850. 319 

number of adults who could read and write, from 1840 
to 1870, increased thirty-five per cent faster than the 
population, and from 1840 to 1877 the number of chil- 
dren who attended school (all kinds) increased about 
seventy-five per cent faster than the population. 
During the same period the number of children who 
attended the public schools (workingmen's children) 
increased eight hundred per cent faster than popula- 
tion. 

The marked growth of general intelligence among 
the masses is also shown by the great increase in the 
number of letters written by the common people. 
The post-office returns for the last decade of the period 
referred to (1867 to 1877) show that the number of 
letters sent through the mails rose from twenty-seven to 
thirty-five per head of the population,* or about thirty 
per cent, and the amount of newspaper reading in- 
creased to a still greater extent. 

Criminal statistics for the same period afford equally 
conclusive evidence of the growth of the moral char- 
acter of the masses. According to the official returns, 
the number of persons convicted of crime in Great Brit- 
ain in 1840 — four years before the adoption of the half- 
time school system — was I in every 78of of the popu- 
lation ; in 1850 it was 1 in every 870 \\ in i860, I in 
2071 ; in 1885, 1 in 3272^ being a diminution of crime 
in proportion to population of seventy-five per cent 
since 1840 and seventy-three per cent since 1850. 

But this marked reduction of the criminal calendar 
is far from being the only evidence of the moral prog- 

* Mulhall's " Progress of the World," p. 94. 

\ Ibid., p. 167. \ Ibid., p. 89. 

§ First Report of the United States Commissioner of Labor, 1886, 
P- 43i- 



320 WEALTH AND PROGRESS. 

ress among the masses during this period. If we 
examine the matter of the consumption of alcoholic 
drinks, we shall find that the facts all point in the 
same direction. 

Indeed, we might well marvel were it otherwise, for 
the simultaneous decrease of crime and increase in the 
use of alcoholic drinks, if not impossible, is very im- 
probable. Professor Leone Levi, in an exhaustive 
analysis of " the consumption of alcoholic and non-alco- 
holic beverages," has shown* that from 1867 to 1883 
the consumption per head of the population of the 
former has steadily diminished, while that of the latter 
has greatly increased. From Professor Levi's figures 
it appears that the amount per capita of the population 
expended in spirits in 1867 was four dollars and 
ninety-four cents, and in 1883 was four dollars and 
eighty-eight cents. The amount per capita spent in 
wine in 1867 was one dollar and eight cents, and that 
in 1883, one dollar and six cents. The amount spent 
on beer — the beverage of the masses — in 1867 was 
ten dollars and seventy-two cents, and that in 1883, 
nine dollars and sixty cents per capita. It will thus 
be seen that while the amount spent per head of the 
population for all kinds of intoxicating drinks has 
diminished 7.27 per cent, the reduction is mostly on 
the consumption of beer — the laborer s beverage. While 
the amount spent upon wine and spirits decreased 
fourteen cents per head, or less than two per cent, that 
spent upon beer was reduced one dollar and twelve 
cents per head, or 11.66 per cent, clearly showing 
that the change is in the habits and character of 



* "Wages and Earnings of the Working Classes," London, \i 
pp. 59-69. 



DECREASE IN THE USE OF BEER. 



321 



the laboring classes, and not in those of the upper 
classes. 

It may be further added that the decrease in the 
amount spent by the masses upon alcoholic drinks is 
not due in any degree to a change of prices, by which 
the same amount of liquor can be obtained for less 
money, but it is due to a bona fide diminution of the 
actual amount consumed per head of the population. 
Whatever influence the change of prices has had in 
that direction, which is very slight, has related to the 
wines and spirits of the upper classes, and not to the 
laborer's beer, as the following facts clearly show : 





Gallons 
per Head. 

1S67. 


Gallons 

per Head. 

1883. 


Actual Increase or 
Decrease per Head. 


Beverages. 


Increase, 

Gallons. 


Decrease, 
Gallons. 




O.71 
O.28 


O.83 
O.23 


O.I2 
O.07 


O.O5 


Total 


O.99 


I.06 










0.45 


O.4O 




O.O5 








29.66 


27.IO 


2.56 







It will be observed from the above that, taking the 
wine and spirits separately, the consumption of the 
latter has increased seven one hundredths of a gallon, 
and that of the former has fallen five one hundredths 
of a gallon per head, showing a net increase in the 
aggregate consumption of wine and spirits of two one 
hundredths of a gallon per head per annum, while that 
of beer — the laborer's drink — has diminished during the 
same period two and fifty-six one hundredth gallons 
for every man, woman, and child in the community. 



322 WEALTH AND PROGRESS. 

Nor is this marked reduction in the use of intoxi- 
cating drink among the masses due in any sense to 
their inability to obtain it, because, as we have seen, 
real wages have steadily increased simultaneously with 
the gradual diminution in the consumption of alcoholic 
beverages. Were further evidence of this needed, 
it is abundantly supplied by the fact that during the 
same period that the use of alcoholic drinks has de- 
clined, that of non-alcoholic beverages has greatly in- 
creased. From 1867 to 1883 the consumption of tea 
per head increased 30.43 per cent, and that of cocoa, 
which is, hygienically, one of the most wholesome of 
all non-intoxicating beverages, increased 157.14 per 
cent, while the use of coffee, which is admitted to be 
the least hygienic of the non-intoxicants, has declined 
14.42 per cent. The use of milk and sugar per head 
has also greatly increased. The most recent revenue 
returns also fully sustain these facts. The British 
Chancellor of the Exchequer, in his speech in the 
House of Commons, introducing the national budget 
last year (1886), called special attention to the fact 
that while the revenue from alcoholic beverages had 
fallen off, that from the wholesome necessaries of life 
had more than correspondingly increased. 

From the above, three important facts are conclu- 
sively established : (1) That the diminished expendi- 
ture per head for intoxicating beverages correctly 
indicates a bona fide decrease in the use of those bever- 
ages, because the quantity per head actually consumed 
has diminished in about the same ratio as the amount 
expended upon it. (2) That this decrease is wholly 
confined to the beverages mostly used by the masses, 
and is therefore clearly due to the diminution in 
their habitual use of them. (3) That the use of in- 



DE CREA SE OF PA UPERISM. 323 

toxicating drink and the perpetration of crime among 
the laboring classes have both actually and relatively 
decreased in proportion as their wages and social 
opportunities have increased.* 

As the natural result of higher wages, lower prices, 
greater intelligence, and purer morals, we naturally 
expect and do find a decrease of pauperism. Ac- 
cording to the official returns in 1850, f the number 
of paupers in Great Britain was as 1 to every 18 
of the population. In 1860^: it was as 1 to 34 of the 
population. And in 1885 it was only as 1 to every 46 
of the population, showing a relative decrease of pau- 
perism to population of sixty-one per cent. 

These facts furnish a complete answer to, and should 
forever silence, that shallow and flippant libel upon the 
laboring classes which, for more than half a century, 
has been constantly repeated, but never sustained — 
that " the reduction of the hours of labor tends to 
lower wages, increase idleness, dissipation, drunken- 
ness, and vice.'' 

We do not refer to these facts to give the impres- 



* In presenting some important statistics showing the " moral 
effects of high and lew wages," Professor Levi says : " It has been 
alleged that high wages only lead to extravagance and folly. I see 
no reason for such a proposition. As a rule, and in the long run, 
scarcity, low wages, and scantiness of food go hand in hand with high 
mortality, drunkenness, and crime ; while abundance, high wages, 
and full consumption go hand in hand with low mortality, temper- 
ance, and good behavior." — " Wages and Earnings of the Working 
Classes,'' 1885, p. 35. Mulhall also gives some striking facts upon 
this point. See " Progress of the World," p. 103. 

f Mulhall's " Progress of the World," p. 89. 

% Statement prepared by Sir John Lubbock from the official statis- 
tical report of Great Britain, quoted in the first report of the United 
States Commissioner of Labor, 1886. 



324 WEALTH AND PROGRESS. 

sion that the English laborer has reached the social 
millennium — not by any means. 

The social state of a people where twenty out of 
every one hundred adults are still unable to read and 
write — where, on the average, every man, woman, and 
child annually consumes 1.46 gallons of wine and spirits 
and 27.10 gallons of beer — where 1 in every 46 of the 
population is a pauper, and 1 in every 3272 is a criminal 
— is not only very far from ideal perfection, but it can 
hardly be said to have reached more than the threshold 
of civilization. Our reason for calling attention to these 
facts is to show the important economic and social les- 
son they contain — that the elimination of poverty, 
ignorance, pauperism, intemperance, crime, and their 
accompanying evils move parallel with, and proportion- 
ate to, the social opportunities of the laboring classes. 

The advocates of laissez faire will doubtless be 
ready to ascribe England's remarkable progress during 
the above period to her free-trade policy ; but those 
who take that position will be called upon to explain 
how it is that, while England's free-trade policy ap- 
plies to her whole people, it is only in those portions 
of the country where short-hour legislation and half- 
time schools obtain that this progress is to be found. 
They must explain how it is that the laboring classes 
in those sections of the country not affected by this 
legislation have made little more progress during that 
period than the same class of laborers in other Euro- 
pean countries — they will have to explain how it is 
that since 1850 the wages of the mechanics and arti- 
sans have increased two dollars and forty-three cents 
a week, while those of the agricultural laborers have 
only risen about seventy-two cents a week. They 
will also have to explain how it is that the homes of 



ITS INFLUENCE IN AMERICA. 325 

the English agricultural laborers to-day are very little 
better than those of the continental peasantry, while 
those of the Lancashire and Yorkshire operatives are 
far superior to those of the laboring classes of any 
other country, outside of America. 

The good results of this policy are not only to be 
seen in the improved material condition of the masses, 
but in their intellectual and moral condition as well. 
Public opinion and legislation on the side of freedom 
and human progress have been practically moulded 
and directed by its effects. Every important reform 
that has occupied the public mind in England during 
the last quarter of a century — industrial, social, politi- 
cal, or religious — has originated in and received its 
main support from the people in those parts of the 
country where the influence of short-hour legislation 
and half-time schools has prevailed. It is notorious 
that the backbone of opposition to all popular reforms 
has been found in the representatives from the agri- 
cultural districts and the landed aristocracy. Even 
the enfranchisement of the agricultural laborers them- 
selves was not the result, in any appreciable degree, of 
their efforts, but was mainly due to those of their 
brethren in the towns, who had long since procured 
that privilege for themselves. 

Nor has the influence of this legislation upon prog- 
ress been limited to England. We in America owe 
more to the moral results of these measures than we 
have yet learned to recognize. During the dark days 
of the Rebellion, when the success of the Union arms 
was very doubtful, and the English Government stood 
ready, as we then feared and still believe, to give aid 
and comfort to the enemy, the one bright spot above 
the horizon was the public opinion created by the 



326 WEALTH AND PROGRESS. 

workingmen in the manufacturing districts in the 
north of England. Although the cotton industry was 
prostrated there for years, and thousands of operatives 
were out of employment, many of whom were on the 
verge of starvation, as the result of our war, they not 
only bore it without a murmur, but they turned England 
into a hot-bed of agitation by monster open-air meet- 
ings, from one hundred thousand to five hundred thou- 
sand strong, unanimously declaring for the freedom of 
the slave and the success of the Union, and instructing 
their representatives in Parliament to oppose every 
effort of the Government to recognize or assist the 
Rebellion. In the face of this popular force, the min- 
istry did not dare do more than wink at the building 
of the Alabama. 

I repeat, it was not from the agricultural districts 
that this declaration against slavery came. Not a 
single meeting was ever held nor a voice heard, in or 
out of Parliament, from those parts of the country on 
this question. No ! It was from Birmingham, Man- 
chester, Leeds, Bradford, Halifax, Oldham, Bolton, 
Stockport, Rochdale, and the manufacturing districts 
of the great north, that, as the first fruits of the seed 
of progress that had been planted by the ten-hour law 
and half-time schools, there arose a popular power, 
which, at an opportune moment, stayed the hand of 
the British Government, and helped us to save the 
republic. 

The effect of similar legislation in Massachusetts is 
equally encouraging. The results there are not so 
pronounced as in England, because the ten-hour law 
has only been in operation a few years, and it affects 
a much smaller proportion of the population. But, 
notwithstanding this fact, its elevating influence upon 



TRIED IN MASSACHUSETTS. 



3 2 7 



the masses is so apparent that it has become very pop- 
ular among all classes in the community ; so much so, 
that many of those who strongly opposed its adoption 
would now, with equal force, object to its repeal. In 
1880, six years after the passage of the ten-hour law 
in that State, as the result of an argument made be- 
fore the Legislative Labor Committee by a prominent 
free-trade advocate, Edward Atkinson, who has always 
been an active opponent of the law, on the ground 
" that its operation was injurious to the workingmen, 
as they had to work for one eleventh less than similar 
laborers in other States," the legislature ordered the 
Labor Bureau to investigate the hours of labor and 
the wages paid in Massachusetts and in the other New 
England States, and also in New York. This was 
done, and the result, which appeared in the Bureau 
Report for 1881, was as follows : 



State. 



Maine 

New Hampshire 
Connecticut. 
Rhode Island .. 

New York 

Massachusetts.. 




Average Wages 
per Week. 



57-04 
7-44 
7.81 
8.61 
7-57 
8.32 



It will be seen from this investigation, which was 
instituted by the enemies of the law, that in the States 
of Maine, New Hampshire, Rhode Island, Connecti- 
cut, and New York the average working time is sixty- 
five and one half hours per week, and the average wages 
of labor seven dollars and sixty-seven cents per week ; 
while in Massachusetts, with only sixty hours a week, 



328 WEALTH AND PROGRESS. 

the average wages are eight dollars and thirty-two 
cents per week, or sixty-three cents a week more for 
five and a half hours a week less labor. That is to 
say, the laborer in Massachusetts works twenty-two 
hours, or over two full days, less, and receives two dol- 
lars and fifty-two cents per month more wages than 
do similar laborers in the other States referred to. 

There never was any legislation adopted in any 
country in the world that has yielded such good eco- 
nomic fruit ! It operates alike under a monarchy in 
Europe and a republic in America. In fact, it is the 
one species of industrial legislation that has never 
failed, and its results have only been limited by the 
extent of its application. 



CHAPTER VIII. 

THE RELATIVE INDUSTRIAL PROGRESS IN ENGLAND 
AND OTHER COUNTRIES SINCE 1850. 

SECTION I. — England and Continental Countries Com- 
pared. 

In the last chapter two important facts were estab- 
lished : (1) That the reduction of the hours of labor 
and half-time schools for working children is a practi- 
cal and feasible proposition ; and (2) That it has not 
only not been inimical to the economic interests of 
either the laborer or the capitalist, but that under the 
influence of the leisure and social opportunities created 
by it, the material, social, and political progress of 
the masses has been phenomenal — such, indeed, as 
the world has never before seen. While it is not pre- 
tended that all the social advancement that has taken 
place in Great Britain since 1850 is due to her short- 
time industrial policy, that a very considerable portion 
of it is the result of this legislation can be easily shown. 
To do this, it is only necessary to compare the progress 
of the social well-being of the masses in England and 
other countries during the period under consideration. 
The most infallible test of the social well-being of the 
masses in any community is the general rate of real 
wages. 

In instituting a comparison between the rate of 
wages paid in England and in other countries, it 
should be remembered that the question is not whether 



33° WEALTH AND PROGRESS. 

or no wages are higher in England than elsewhere, but 
whether the actual increase in the amount of wealth 
obtainable for a day's wages has been greater in Eng- 
land than in this country or on the continent since 
1850. 

Nor can the comparative industrial improvement be 
ascertained by the percentage of increase in the wages 
in the different countries, because, for reasons already 
explained,* the highest percentage of increase may 
sometimes indicate the smallest actual rise in real 
wages, and vice versa. We shall, therefore, always 
take the actual amount and not the percentage of the 
increase in the quantity of wealth received as the 
measure of the material progress. 

From the most reliable sources, we have already seen 
that the general rate of nominal wages in England, 
exclusive of agriculture, from 1850 to 1883, at the 
lowest estimate, has actually increased two dollars and 
ten cents per week. Now, according to Mulhall.f 
the average wages of artisans in France, from 1850 
to 1880, only rose one dollar and forty-one cents per 
week, and the official returns for eighteen leading 
industries in the principal cities in France, from 
1853 to 1882, ;j; show an average increase of one 
dollar and sixty-three cents per week.§ The mean 

* Chapter VII., Part III. f " History of Prices," 1885, p. 124. 

\ See tables in First Report of United States Commissioner of 
Labor, 1S86, p. 237. 

§ It will be observed that these returns do not cover exactly the 
same dates as Mulhall's, going back three years less and coming down 
two years later. This will doubtless explain at least some of the dif- 
ference, as the same tables show that from 1853 to 1881 the rise was 
only $1.60. Had they gone back to 1850 and only come to 1880 the 
result would probably have been very similar to Mulhall's. This is 
important only as showing the similarity of two different investiga- 



WAGES IN FRANCE AND GERMANY. 331 

average of these would be one dollar and fifty-two 
cents per week ; but to give France the benefit of the 
most favorable returns, we will call it one dollar and 
sixty-three cents. Taking the official returns for nine- 
teen industries, including spinners, weavers, winders, 
carders, firemen, laborers, machinists, carpenters, 
joiners, masons, etc., in the Rhine District of Ger- 
many, which are complete for every year from 1855 to 
1885,* we find the average rate of wages has increased 
one dollar and fifty-four cents per week. Among the 
many other investigations for different portions of this 
period, all of which tend to show the general accuracy 
of the above, may be cited the elaborate tables given 
by Edward Young. In addition to a vast amount of 
statistical data relating to the wages and industrial 
conditions in Germany, Professor Young gives a very 
full table f of the average wages paid in eighty-four 
different industries from i860 to 1868, inclusive. Dur- 
ing the nine years covered by these tables, it appears 
that wages rose a fraction less than forty-six cents a 
week. If they had risen at that rate throughout the 
whole thirty years (185 5-1 885), the increase would 
have been exactly one dollar and fifty cents a week. 
This is only four cents a week less than is shown by 
the returns quoted above, which may therefore be re- 
garded as substantially correct. As to the other con- 
tinental countries, I have been unable to obtain reli- 
able data as to actual wages for a sufficient portion of 
the period under consideration to warrant fair com- 

tions of the same facts, which is the best internal evidence of their 
general correctness. 

* See tables in Report of United States Commissioner of Labor, 
18S6, pp. 238, 239. 

f " Labor in Europe and America," 1875, pp. 525, 526. 



33 2 WEALTH AXD PROGRESS. 

parisons, but there is ample data of other kinds just as 
conclusive (as we shall soon see), showing that the 
actual increase of wages in Italy, Spain, Austria, Rus- 
sia, etc., since 1850 has been much less than in France 
and Germany. Therefore, taking the most liberal es- 
timates for France and Germany, and the most mod- 
erate ones for England, the facts in relation to the 
rise in weekly wages may be stated as follows : 



Countries. 


Amount of In- 
crease per 
Week. 


Hours of 

Labor per 

Week. 




$1-54 
I.63 
..10 


75* 

72 

6of 







From the above it will be seen that the increase in 
the average wages in England since 1850 has been 
forty-seven cents a week more, with two hours a day 
less (and for children under fourteen seven hours a 



* This is, if anything, too low. So far as I know, there is no law 
limiting the hours of labor for adults in Germany, but the prevailing 
practice appears to be thirteen or more hours a day. " Throughout 
nearly the whole of Prussia," says Professor Young, " artisans and 
apprentices work regularly in summer from 5 a.m. to 12, and from 1 
P.M. to 7, and even later ; and in winter from daybreak, sometimes 
6 a.m. to 8 or 9 in the evening. The hand-weaver frequently sits in 
his loom, employed at monotonous labor, for sixteen hours in the day. 
The agricultural laborers have to work hard for twelve hours a day 
out of harvest-time, and during harvest-time for fourteen hours. The 
same rule applies to farm servants. The extreme length of the hours 
of daily labor is indeed one of the dark phases of the condition of the 
working classes in Prussia, and generally throughout Germany." — ■ 
" Labor in Europe and America" 1875, p. 573. 

f Reduced to fifty-six hours per week in 1874, which has been the 
general law and practice ever since. 



PRICES IN THE VARIOUS COUNTRIES. 333 

day less) labor than those in France, and fifty-six cents 
a week more, with nearly three hours a day less than 
those in Germany. 

If we compare the variation of prices in those coun- 
tries, which it is necessary to do in order to know how 
much wealth or real social well-being this rise of wages 
represents, we shall see the difference is still greater 
in favor of England. I have been unable to obtain 
anything like full returns of prices for the whole of the 
period since 1850, but, such as there are, they all 
clearly point in that direction. The price of wheat, for 
example, in England, has fallen from one dollar and 
sixty cents a bushel in 1850 to one dollar and sixteen 
cents a bushel in 1881 ; while in France during the 
same period it actually rose from one dollar and fifty- 
six cents to one dollar and sixty cents a bushel. And 
taking a given quantity of wheat, potatoes, meat, eggs, 
butter, and sugar, which in France in 1850 cost 
ninety-four dollars and twenty-four cents, in 1880 cost 
one hundred and six dollars and eight cents, showing 
an actual increase of eleven dollars and eighty- four 
cents, or over twelve and one-half per cent ; while the 
same quantity of the same articles in England in 
1850 cost eighty-six dollars and eight cents, and in 
1 88 1 only sixty-six dollars and forty cents, showing an 
actual fall of nineteen dollars and sixty-eight cents, 
or about twenty-three per cent.* 

The same is true to even a greater extent of manu- 
factured articles. This is shown by the fact that, in 
spite of high tariffs, England can compete with, and, in 



* These prices are taken from Tooke and Mulhall's " Histories of 
Prices," the former of which comes down to 1S55, and the latter to 

1885. 



334 WEALTH AND PROGRESS. 

many branches of industry can undersell, continental 
countries in their own markets, although she pays from 
thirty to eighty per cent higher wages than they do. 
While the statistics of prices on the continent are not 
complete for the whole of the period from 1850, they 
are quite ample for the last quarter of a century, suffi- 
ciently so to enable approximately correct general price 
levels to be obtained in the leading countries. Accord- 
ing to Mulhall's tables, the price level of 1881-83, as 
compared with that of 1863-70, fell in the different 
countries as follows : England, twenty-eight per cent ; 
France, twenty-one per cent ; Italy, twenty-one per 
cent ; and Belgium, six per cent. Germany is not 
given, but assuming the fall of prices to have been as 
great there as in France, it will be seen that since 1870 
the price level has fallen — i.e., the purchasing capacity 
of a dollar has increased nine cents more in England 
than in France or Germany, and nearly ten cents more 
than the average of the four most advanced continental 
countries. As a general fall of prices is an actual 
addition to real wages, if we add this to the amount 
of the rise in nominal wages already referred to, we 
shall have an approximately correct statement of the 
actual and relative increase in the material well-being 
of the laboring classes in those countries. 

Now, assuming that the general movement of prices 
from 1850 to 1870 was as great in France and Germany 
as it was in England- — which we have every reason for 
believing it was not — the actual increase in real wages 
since the adoption of the ten-hour and half-time work- 
ing system in England stands as follows : 

Germany $1.62 per week. 

France 1.72 " 

England 2.40 " 



AGRICULTURAL WAGES. 



335 



Thus showing that the real wages of every laboring 
man, woman, and child have increased since 1850 
sixty-eight cents a week more for two hours a day less 
labor in England than they have in France, and 
seventy-eight cents a week more for nearly three hours 
less labor a day than they have in Germany. 

That this greater rise in real wages in England is 
due to the increased social opportunities afforded by 
short-hour legislation, is clearly shown by the fact that 
the wages of the agricultural laborers — to whom it did 
not apply, except indirectly through their contact 
with the towns — have only risen in about the same 
ratio as those of the same class on the continent, as 
will be seen by the following table of daily wages of 
agricultural laborers in the various European countries 
in 1835 and 1884.* 



Countries. 



England 

France 

Germany 

Austria 

Holland and Belgium 

Russia 

Italy 

Scandinavia 



1835. 


1884. 


$0.32 


$0.50 


•30 


• 50 


.16 


• 36 


.20 


.40 


.18 


.40 


.12 


.24 


.IO 


.24 


.16 


.28 



Increase. 



£0.24 
.20 
.20 
.20 
.22 
.12 

•14 
.12 



This is inconsistent with the theory that high wages 
increase prices, but it is in full accord with the prin- 
ciple we have maintained throughout this work, that 
high wages in the long run mean cheap things, and 
low wages mean dear things. This is so, for the sim- 
ple reason that high wages mean large consumption, 



* Mulhall's " History of Prices," p. 125. 



33^ 



WEALTH AND PROGRESS. 



which in turn means the more extensive use of cap- 
ital and improved methods of production, and, as a 
consequence, always reduces prices. Accordingly, we 
find the use of natural forces is the greatest, and hence 
motive power is the cheapest, in those countries where 
wages are the highest, as will be seen from the follow- 
ing- table :* 



Countries. 



Russia '. 

Austria. 

Italy 

Portugal 

Scandinavia 

Spain 

Holland 

France 

Germany 

Switzerland 

Belgium 

Great Britain 

Average for Europe 

Average for the Continent 



Percentage 

of Steam 

Power Used. 



IO 

2 9 

34 
34 
34 
4i 
45 
58 
60 

7i 
73 
78 



45 



36 



Cost per 1000 

Foot Tons of 

Energy in 

Cents. 



25.20 
32.20 
35.60 
42.40 
20.4O 
27.60 
29.40 
28.40 
23.20 
22.40 
20.20 
16.80 



24.20 



26.60 



Weekly 

Wages Paid 

to the 

Laborers. 



.60 
.84 
.60 
.60 

.66 
.84 

.80 
.04 

.84 
.80 
.80 
•44 



MO 



It will be seen from the above, that wages are eighty- 
four per cent higher, the use of steam is one hun- 
dred and seventeen per cent greater, and the cost of 
productive power thirty-seven per cent less in England 
than is the average in continental countries. 



* These tables are condensed from those given by Mulhall in his 
"History of Prices," 1885. , 



PRODUCTIVE POWER OF VARIOUS NATIONS. 337 

To state the same fact another way : Through the 
larger consumption and consequent improved methods 
of production, the productive capacity of ten laborers 
in England (assuming their skill and dexterity to be 
the same) is equal to twenty in France, twenty-six in 
Germany, twenty-seven in Austria, forty-three in 
Spain, sixty-one in Italy, and seventy in Portugal. 

This explains why, with a greater rise of wages, there 
has been simultaneously a greater fall of prices in 
England than on the continent since 1850. Hence, 
the great English statistician proudly and truly ex- 
claims : * "This advantage enables us (England), as 
far as labor is concerned, to undersell continental na- 
tions by twelve per cent, although pur workmen's 
wages are almost double." 

The degree of progress in the material well-being in 
any country is also clearly indicated by the actual in- 
come per capita of the population. Measured by this 
standard, the actual progress in the different coun- 
tries in Europe, from 1870 to 1880, was as shown in 
table on next page. 

From this table it will be learned that four im- 
portant facts are established : (1) That since 1870 
the gross income per capita of the population has in- 
creased in every country in Europe except Turkey. 
(2) That in Russia, Italy, Portugal, and Germany tax- 
ation per capita has increased in a greater ratio than 
the earnings. Hence, the net income (free of taxes) 
in those countries was actually one dollar and ten 
cents per capita less in 1880 than in 1870. (3) That 
in England the increase in the gross income per capita 



* Mulhall's " History of Prices," p. 57. 
16 



338 



WEALTH AND PROGRESS. 



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SUPERIORITY OF ENGLAND. 339 

during that period was ten times as great as that of 
taxation, and four times as much as the continental 
average. (4) That in England the actual increase in 
the income per capita, free of taxes, was five dollars 
and seventy-eight cents per annum more, or nearly 
double, that of any other European country, more 
than four times that of the European average, and over 
six times as large as that in continental countries. 

It will thus be seen that in whatever way we con- 
sider the question, we find that the actual increase in 
the consumable wealth per capita (real well-being) has 
not only been nearly twice as great in England as that 
of any other country, but, taking them altogether, 
the increase per head subject to taxation has been four 
times as great, and that, after deducting taxes, has 
been six times as great as that of countries which have 
not adopted a similar industrial policy. Again, if we 
compare the present actual condition of the masses in 
England with that of those in continental countries, 
the difference is equally pronounced. 

One of the best indications of the social condition 
of any people is the extent to which their energies are 
absorbed in providing food, clothes, and shelter. 
Whatever the nominal rate of wages may be, the social 
condition is the highest where these physical necessi- 
ties can be obtained with the fewest days' labor, and 
where the largest proportion of the laborer's time and 
energies is devoted to the gratification of the higher 
social wants, and vice versa. 

The average number of days' labor per year required 
to furnish the laborer with food, clothing, house-rent, 
and taxes, and those remaining to be applied to the 
satisfaction of the higher social wants in the various 
European countries, are as follows : 



34° 



WEALTH AND PROGRESS. 



Countries. 



Great Britain. , 

France 

Germany , 

Italy , 

Belgium 

Russia 

Austria. . 

Spain 

Scandinavia 

European average . 

Continental average 



Food. 



114 

I20 

155 
162 

133 
180 

159 
164 

147 



I4S 



152 



Clothes. 



34 
36 
40 

44 
40 

49 
43 
4i 
40 



40 



41 



House 
Rent. 



29 

30 
27 
24 
20 
20 
22 
24 
23 



24 



2 3 



Taxes. 



32 

45 
38 
60 
33 
37 
34 
56 
30 



40 



4i 



Higher 
Social 
Wants. 



9 1 

69 
40 
10 
74 
14 
42 

15 
60 



46 



40 



From these facts it will be seen that the English 
laborer, poor as he is, after supplying himself and 
family with food, clothes, and shelter (all of which are 
better than those of his continental brother), and pay- 
ing his quota of taxation, has left to be devoted to 
his higher social wants the income from ninety-one 
days' labor a year ; or that of twenty-two days more 
than the Frenchman, forty-nine more than the Aus- 
trian, fifty-one more than the German, seventy-six 
more than the Spaniard, seventy-seven more than the 
Russian, and eighty-one more than the Italian. 

In other words, the average Englishman is seven- 
teen days' labor a year better off than the best, eighty- 
one days better than the worst, and fifty-one days 
better than the average laborer on the continent. Or, 
stated in money, the Englishman, after paying for his 
food, clothes, house-rent, and taxes, has one hundred 
and twelve dollars and eighty-four cents a year to de- 
vote to his higher wants, as against fifty-seven dollars 
and ninety-six cents for the Frenchman, twenty-five 
dollars and sixty cents for the German, eight dollars 



EDUCATION OF CHILDREN. 



341 



and forty cents for the Russian, and only six dollars a 
year for the Italian. Nor has the intellectual prog- 
ress of the masses in England during the period under 
consideration, as compared with that of those on the 
continent, been any less pronounced than that of their 
material prosperity. Take the matter of education, 
for instance. The number of children in proportion 
to population who attended school in England before 
the passage of the half-time school and ten-hour laws 
was one fourth less than in the low countries, one 
third less than in Switzerland and Scandinavia, and 
nearly one half less than in Germany ; and in 1878 it 
was equal to that of Germany, greater than that of 
any other country in Europe, and about seventy per 
cent above the continental average, having increased 
about eighty per cent. 

Another evidence of the greater progress in the gen- 
eral intelligence of the masses in England, as com- 
pared with other countries, is shown by the greater in- 
crease in the number of letters sent through the mails 
per capita of the population, as will be seen by the 
following post-office returns for 1867 and 1877 : 



Countries. 


1867. 


1877. 


Actual In- 
crease per 
Capita. 




27 
10 

9 
24 

9 

7 

6 

4 
3 
i* 

i 


35 
10 

15 

30 

14 

9 

8 

5 
4 
2 
1 


8 




6 
6 


Low Countries 


5 


Scandinavia. . . 


Austria 




Spain and Portugal 


1 


Italy 




Greece 


i 

1 


Russia 







342 WEALTH AND PROGRESS. 

Thus it will be seen that letter-writing, which is one 
of the best evidences of intelligence and general cul- 
ture, has not only increased during the decade referred 
to thirty per cent per capita more in England than 
in any other country in Europe, and two hundred and 
fifty per cent more than the average on the continent, 
and, with the exception of Switzerland, it has more 
than doubled that of any other country in Europe. 

Poverty, ignorance, and immorality being the nat- 
ural accompaniments of each other (which all statis- 
ticians now admit), a permanent improvement in the 
material conditions and an advance in the general in- 
telligence may be taken as implying higher morality.* 
Accordingly, we find that crime in proportion to 
population has diminished seventy-eight per cent in 
England since i850,f only a little over thirty per 
cent in France, and twenty-five in Germany during 
the same period ; while in Italy there has been no 
perceptible decrease of crime during that time. And, 
as we have seen in the last chapter, the number of 
paupers, as compared with population, has decreased 
sixty-one per cent since 1850, while in France they 
have slightly increased (one fourth of one per cent).^; 

Although the number of paupers has not been di- 
minished in France during the last thirty years, it is 
lower there than in any other country except England. 
This shows that the number of paupers was much 



* " That public morality has risen in every country in the same de- 
gree as instruction is fully proved by the statistics of crime. In Great 
Britain, for example, the annual convictions compared to population 
have fallen sixty per cent in the last forty years." — Mulhalts " Prog- 
ress of the World," p. 102. 

f Chapter VII., Part III., p. 319. 

i Mulhall's " Progress of the World," p. 546. 



PAUPERISM IN VARIOUS COUNTRIES. 



343 



smaller prior to 1850 in the former than in the latter 
country. Through the influences to which we have re- 
ferred, since that time they have been so greatly re- 
duced in England, while remaining stationary in 
France, that to-day, although England keeps a more 
complete registry of her needy poor, she has a smaller 
number of paupers per hundred of the population than 
any other European country, as the following official 
statement for 1880 clearly shows : 



Countries. 



Great Britain 

France 

Austria 

Italy , 

Prussia. 

Switzerland 

Scandinavia 

Low Countries 

Average 

For the Continent 



Total Number 
of Paupers. 



1,037,000 
1,151,000 
1,220,000 
1,365,000 
1,310,000 
140,000 
301,000 
1,010,000 



No. per 1000 
of the Popu- 
lation. 



30* 
32 

35 

48 
50 

54 

38 

105 



49 



51 



From this it will be seen that there has not only 
been a greater diminution of pauperism in England 
than in any other country since 1850, but that in 1880 
it was actually seven per cent less than the lowest, and 
forty-two per cent less than the average in continental 
countries, and in 1885 the difference was still greater. 

Evidence of this kind could be almost indefinitely 
increased, but enough has been produced to clearly 
establish the truth of our claim that every phase of 



* In 1885 there were only a little over twenty-one paupers to the 
thousand of the population in Great Britain. 



344 WEALTH AND PROGRESS. 

social progress — material, intellectual, and moral — has 
been strikingly greater in England since the adoption 
of the half-time and ten hour working system than in 
any other country in Europe which has not adopted 
that industrial policy. 

If we compare the progress of the political freedom 
of the British laborer with that of those in other Euro- 
pean countries, the difference is equally marked in 
favor of England. 



Section II. — Industrial Progress in England and the 
United States Compared. 

In view of the higher wages and superior social and 
political condition of the masses in this country, we 
have come to habitually regard republican institutions 
as proof against the influence of economic conditions. 
Accordingly, while we have looked with some degree 
of sympathy not unmixed with self-conceit upon the 
industrial condition of the European laborer, we have 
persistently — though, perhaps, to a large extent un- 
consciously — adopted the same industrial policy, as 
though the same causes would not produce the same 
effects here as in Europe. Under the spell of this 
optimistic blindness, we have accepted England's 
economic doctrine, and ignored her industrial reforms. 
The consequence is, that the same industrial and social 
evils which we have vainly endeavored to believe were 
peculiar to Old World monarchies have become a per- 
manent feature of our social life under democratic in- 
stitutions. 

Industrial depressions and enforced idleness, with 
all their evil consequences, are now as frequent 



INDUSTRIAL DEPRESSIONS. 



345 



here as in Europe, as the following table clearly 
shows : 



Great Britain. 


France. 


United States. 


Germany. 


Belgium. 


1803 


1804 








I8IO 


l8lO 








I8I5 


I8I3 


1814 






I8l8 


I8l8 


I8l8 






1826 


1826 


1826 






1830 


1830 








1837 


1837 


1837 


1837 


1837 


1847 


1847 


1847 


1847 


1848 


1857 


1856 


1857 


1855 


1855 


1866 


1866 


1867 




1S64 


1873 


1873 


1873 


1873 


1873 


1883 


1882 


1882 


1882 


1882 


1885 


1885 


1885 


1885 


1885 



The pernicious industrial policy pursued in this coun- 
try, which recognizes the laborer only as a physical 
factor in production, while ignoring him as a social 
factor in consumption, forcing him to accept long hours 
of exhaustive labor, with its socially degrading belong- 
ings, has greatly neutralized the social advantage of 
our republican institutions. As a consequence, we 
are to-day brought face to face with the startling 
fact, which every American statesman and citizen may 
well take seriously to heart, that during the last 
thirty- five years the laboring classes in this country 
have actually made less progress in social well-being 
than those of monarchical England. 

We must not be understood as saying the laborer in 
England is better off to-day than the laborer in this 
country, nor as saying that the economic condition of 
the American laborer is now worse than it was in 1850. 
What we affirm, and what the facts prove, is that 
the progress in the social well-being of the masses since 



346 WEALTH AND PROGRESS. 

that date has been less in this country than it has 
been in England. 

If we compare the real wages — the amount of 
wealth obtainable for a day's labor — in this country and 
England in 1850 and at the present time, we shall 
find not merely that wages have risen a greater per 
cent, but that the absolute increase has been greater 
in England than here. 

In the last chapter (page 246), it will be remembered 
we found that the rate of wages in England (exclu- 
sive of agriculture) from 1850 to 1880-83, taking the 
most moderate estimates, has risen two dollars and ten 
cents per week, and that during the same period the 
general price level has fallen — the purchasing capacity 
of the dollar has increased — about fourteen per cent, 
making a net increase in real wages of sixty-five 
per cent, or two dollars and forty cents a week. Ac- 
cording to the returns given in the general census for 
1850, i860, 1870, and 1880, the average wages in this 
country rose during that period about twenty-nine per 
cent, or one dollar and ninety-nine cents a week.* 
Mulhall estimates that at two dollars and four cents a 
week. If we examine the elaborate returns given in 
the twentieth volume of the United States Census for 
1880, which is specially devoted to wages and prices 
in this country from 1 850 to i88o,f and in which five 

* This is based upon the returns for three hundred and thirty-two 
industries or branches of industries, exclusive of agriculture. See vol- 
ume on Manufactures of United States, Census for 1880 ; Table I. on 
Manufactures, pp. 5-8, and general remarks on manufactures, pp. 
12-20. 

f Speaking of the tables contained in the above volume of the Cen- 
sus Reports, Professor Francis A. Walker says : " The tables which 
are embraced in the following report of Special Agent Weeks consti- 
tute, it is believed, the largest magazine of statistics relating to the 



PRICES IN THE UNITED STA TES. 347 

hundred and sixty-three pages are devoted to tables 
of wages, embracing every occupation (outside of agri- 
culture) in all the States, we find the average wages in 
those industries which existed at both dates have in- 
creased two dollars and twenty-four cents a week. 

But in order to understand the amount of social 
well-being represented in this rise of wages, we must 
ascertain the movement of prices during the same 
period. From the price tables given by Mulhall * for 
each decade from 1825-30 to 1881-83, the average 
price of a given quantity of sixteen principal articles, 
including flour, meat, groceries, dairy products, cot- 
ton, wool, leather, coal, iron, etc., rose from 1841-50 
to 1881-83 twenty-nine per cent, while that of cloth- 
ing and furniture fell nearly thirty per cent. Assum- 
ing this to constitute ten per cent of the laborer's ex- 
penditure (which is a very liberal estimate f), it would 
make a rise in the general price level of twenty-six per 
cent during that period. According to the very ex- 
tensive investigation of prices in Massachusetts made 
by the Bureau of Statistics of Labor, the general price 
level in that State, from 1830 to i860, rose 12.70 per 
cent,:]: and from i860 to 1878 it rose 14. 50 per cent, § 

wages of labor to be found in any single publication. . . . While no 
large body of statistics can be assumed to be free from error, the fol- 
lowing collection of statistical data relating to the wages of labor in 
the United States is believed to have been as thoroughly tested and 
as carefully purged as it is reasonable to expect in the case of any 
statistical work whatsoever. All the virtue there is in frequent re- 
vision has been imparted to these tables." 

* " History of Prices," pp. 183, 184. 

f See Report of Bureau of Statistics of Labor, 1879, p. 89 ; also 
Engel's " Law of Consumption," ibid., 1885, p. 152. 

\ Report of the Bureau of Statistics of Labor (Massachusetts), 1885, 
p. 466. 

§ Ibid., 1S79. Tables VII., VIII. , IX., and X., pp. 87-89. 



348 WEALTH AND PROGRESS. 

making a rise for the whole period of 27.20 per cent. 
And from the returns of the Census Bureau, given in 
the report already referred to,* the price of a given 
quantity of forty articles of food, clothes, and fuel in 
the leading cities and States of the Union from 1850 
to 1880 rose a little over twenty per cent. 

Thus it will be seen that Mulhall's investigations, 
covering the forty-three years from 1840 to 1883, show 
a rise of prices of twenty-six per cent ; that of 
Colonel Wright, embracing the forty-eight years from 
1830 to 1878, shows a rise of 27.20 per cent in the 
price level ; and that of the United States Census 
Bureau for the thirty years from 1850 to 1880 shows a 
rise of 20.17 per cent. 

Now, assuming that half the rise which Colonel 
Wright found to have taken place between 1830 and 
i860 to have occurred before 1850 (which is about 
what is indicated by Mulhall's tables for 1825-30 and 
1841-50), and allowing the same ratio for the ten years 
covered by Mulhall prior to 1850, the result of these 
three distinct investigations of the movement of the 
general price level in this country from 1850 to 1880 
will stand as follows : 

Percentage 
of Increase. 

Mulhall (1850-1883) 23.00 

Colonel Wright (1850-1878) 20.85 

United States Census (1850-1880) 20.17 

While none of these results may be literally true, 
their close similarity affords indisputable evidence of 
their approximate correctness. 

Taking the most favorable estimate (which is prob- 
ably the nearest correct), the price level has risen — 

* Twentieth volume of United States Census, 1SS0, special report 
on wages and prices. 



MISLEADING AGGREGATES. 349 

the purchasing capacity of the dollar has fallen — since 
1850 in this country, twenty per cent. If we deduct 
this from the rise of two dollars and twenty-four cents 
in nominal wages, it leaves a net increase of real wages 
in this country since 1850 of one dollar and seventy- 
nine cents a week, as compared with two dollars and 
forty cents a week in England."* In other words, 
notwithstanding our political and natural advantages, 
the material well-being of the average artisan in mo- 
narchical England has actually increased sixty-four 
cents a week more since 1S50 than that of the laborer 
in republican America. 

If we consider the social well-being of the people 
as indicated by the national income, either inclusive 
or exclusive of taxation, instead of by wages, we shall 
find the facts all point to the same result — viz., that 
the increase in wealth in proportion to the population 
has been greater in England than in this country. 
There are few questions of fact upon which the general 
public are more misled by our public men than upon 
this. The advocates of high tariff, both of the press 
and the forum, are never tired of citing almost be- 
wildering statistics showing the enormous increase 
of wealth in this country, which they ascribe to tariff 
legislation. 

They may show us — as Mr. Blaine frequently did 
during the presidential canvass in 1884 — that from 
1870 to 1880 the annual income of the people of the 
United States rose in round numbers from five billion 
and ninety-eight million to six billion seven hundred 



* The change in house rent in the two countries has been about the 
same. In England in 1880 house rent took the earnings of twenty- 
nine days a year, and in this country it required about thirty. 



350 WEALTH AND PROGRESS. 

and forty-nine million dollars, an actual increase of 
one billion six hundred and fifty-one million dollars a 
year ; while in England, where the income is the next 
greatest in the world, it only rose during the same 
period from four billion six hundred and thirteen mill- 
ion to five billion five hundred and forty-nine million 
dollars, or nine hundred and thirty-six million dollars 
a year. Thus showing that the actual increase in the 
annual earnings of the people of Great Britain during 
the decade from 1870 to 1880 was seventy-six percent 
less than that of those in the United States. 

These facts are presented to prove, and are gener- 
ally accepted as proving, that the well-being of the 
masses in this country had increased during that decade 
seventy-six per cent more than that of those in Eng- 
land. This conclusion, however, as we shall soon see, 
is as false as the figures are correct. The error is not 
in the facts, but in the half use made of them. As a 
measure of the progress in the material well-being of 
the masses, the increase in the aggregate national in- 
come, taken alone, is even more misleading than is 
the percentage of increase in wages before referred to. 
Any percentage of increase, however small, in the real 
wages of the laborer indicates some progress in his 
material well-being, but the aggregate income of a 
nation may double without any improvement ; nay, 
even with a deterioration in the well-being of the peo- 
ple. The wealth or poverty of the people in any com- 
munity does not depend upon the actual amount of 
the aggregate income of the nation, but upon the ratio 
between that income and the population. For ex- 
ample, the aggregate income of Russia is four times 
that of Holland, but the population is more than 
twenty times that of Holland. Consequently, the in- 



INCREASED EARNINGS PER CAPITA: 351 

come per capita (real well-being) in the latter is nearly 
three times as great as that of the former, being one 
hundred and twenty-four dollars and eighty-six cents in 
Holland as against forty-eight dollars and forty-eight 
cents in Russia. If we consider the increase in the 
annual income of England and this country from 1870 
to 1880 in this light, which is the only sense in which 
it can be taken, as indicating the economic well-being 
of the people, we find the charm of these seemingly 
optimistic aggregates is greatly modified. For while it 
is true that the annual income during that decade in- 
creased one billion six hundred and fifty-one million 
dollars in this country as against nine hundred and 
thirty-six million dollars in Great Britain, the increase 
in our population was more than three times as great 
as that of England. The consequence is that the large 
aggregate in this country only 3/ields an actual increase 
of about two dollars and sixteen cents per capita of the 
population, while that of England gave an increase of 
about fourteen dollars and thirty-six cents per capita. 
There is one circumstance, however, which will be 
commonly regarded as greatly modifying the above 
result in favor of the United States. It is the fact 
that taxation in this country during the period referred 
to has been reduced five dollars and twenty-eight 
cents per capita, while that of Great Britain has 
been increased one dollar and forty-four cents per 
capita. If we assume that the whole amount taken 
in taxes is wasted, and recognize only that por- 
tion of the income as representing real well-being 
which is over and above taxation,"" the facts would 



* This would be a mistake, however, for while, perhaps, a larger per 
cent of the wealth taken by taxation is unwisely spent, a considerable 



352 WEALTH AND PROGRESS. 

still show that the net increase was greatly in favor 
of England. 

By adding the five dollars and twenty-eight cents 
per capita saved by reduced taxation to the one dol- 
lar and sixty cents gross increase in this country, 
and deducting the one dollar and forty-four cents per 
capita of increased taxation from the fourteen dollars 
and thirty-six cents increase in the gross income in 
England, the net increase in the annual income per 
capita of the population (free of taxes) in the two 
countries stand : United States, six dollars and eighty- 
eight cents ; Great Britain, twelve dollars and ninety- 
two cents. 

It will thus be seen that, viewing the facts from the 
most favorable standpoint possible for this country 
(even unfairly so), we find that instead of the progress 
in the well-being of the masses having been seventy- 
six per cent greater here than in England (as indicated 
by the aggregate national income), the actual increase 
per capita has been over eighty per cent greater in 
England than in the United States. 

If we compare the progress in the general intelli- 
gence, morality, and freedom in the two countries, we 
shall find the facts are equally in favor of England. 
The number of children attending school, as compared 
to population, since 1850, has increased forty-two per 
cent in England, and less than twenty-five per cent in 
the United States.* The same fact is further indi- 

portion of all taxes are used for purposes which really represent social 
well-being. For example, all wealth devoted to public improvements, 
education, administration of justice, protection of life and property, 
etc., tend to increase the value of wealth and the social safety and 
comfort of the community. 

* Not that the attendance in proportion to the population is actually 
greater in England than in this country, but that the increase during 



CRIME IN ENGLAND AND AMERICA. 353 

cated by the proportion of the population who write 
letters. According to the post-office returns for the 
two countries, we find that the number of letters sent 
through the mails per head of the population from 
1867 to 1877 increased eight in England as against 
four in the United States. 

The criminal calendar shows that the number of 
convictions are (1878) as 1 in 900 of the population in 
this country, as against I in every 1880 of the popula- 
tion in Great Britain. In 1885* they had fallen to I 
in 3272 in England, while in this country they have 
remained practically unchanged, being in 1887 f still 
1 in every 930 of the population. 

It is a notorious fact that during the last quarter 
of a century the social and political institutions in Eng- 
land have constantly tended toward greater democracy 
for the masses, while in this country, as elsewhere 
shown, \ the tendency has been increasingly in the di- 
rection of contracting the democratic principle in our 
government. This movement to limit instead of to 
extend the social influence and political power of the 
masses has become strikingly pronounced in municipal 
and state governments, and is now beginning to 
show itself in our national institutions. All this does 
not mean that the laborer in England to-day is eco- 
nomically better off or politically freer than the laborer 

the last thirty-five years has been greater there than here. In 1830 it 
was forty per cent less there than here, and in 1880 it was only ten 
per cent less. To-day it is probably about the same. 

* First Report of the United States Commissioner of Labor, 1886, 
p. 431 ; also Sir John Lubbock's " Digest of Statistical Repoit for 
1885." 

f Second Report of the United States Commissioner of Labor — ■ 
" Convict Labor," 1887, p. 288. 

% See next chapter. 



354 WEALTH AND PROGRESS. 

in this country, but it does most emphatically mean 
that he is making greater progress in that country. 

Therefore, despite the depressive influence of an 
odious land system, a privileged aristocracy, a state 
church, an obstructive House of Lords, and an opulent 
and obdurate monarchy, it is manifest that the eco- 
nomic, social, and political progress of the masses under 
the short-hour and half-time regime in England has 
not only been greater than that of any other country 
in Europe, but even greater than that of this re- 
public during the same period. 



CHAPTER IX. 

THE SOCIAL AND POLITICAL NECESSITY OF AN 
EIGHT-HOUR AND HALF-TIME SYSTEM. 

It is now clear that the proposition for a general 
reduction of the hours of labor and the adoption of 
half-time schools for working children is not only the- 
oretically sound and practically feasible, but as an 
effectual means for increasing the social opportunities 
and promoting industrial progress, it is more potent 
than are ideal political institutions. 

This is shown by the fact that during the last thir- 
ty-five years the laboring classes have made more 
real progress with short hours under a monarchy in 
England than with long hours under a republic in 
America. Nor is this due to our political insti- 
tutions, but, on the contrary, it affords a striking 
confirmation of the principle we have so frequently 
affirmed, that political institutions are not the cause 
but the consequence of the industrial conditions and 
social character of the masses. Hence, instead of 
regarding our social evils as the result of our political 
institutions, it is only by improving the industrial con- 
ditions and elevating the social character of the masses 
that we can maintain the integrity of our democratic 
institutions. 

The fact that the general adoption of an eight-hour 
and half-time system would be an economic advantage, 
as we have seen, to all classes of the community — to 



356 WEALTH AND PROGRESS. 

say nothing of the humane and moral effects — is 
sufficient to warrant the demand for its immediate 
adoption. But its social and political necessity is 
more imperative than its most sanguine friends have 
hitherto appeared to realize, or its opponents have 
ever been able to understand. As we have so often 
remarked — and it can hardly be repeated too often ; at 
least, until it is much better understood — the true 
barometer of human progress is the social character 
of the people. That is the dial upon which the true 
state of civilization, in all ages and countries, and 
under all conditions, is most correctly registered. 
While it is futile to endeavor to promote intellectual 
and moral development and social and political free- 
dom without industrial prosperity, it is equally impos- 
sible to permanently accelerate industrial progress by 
any means which are inimical to the social and politi- 
cal development of the masses. Yet this is what the 
modern industrial policy of long hours of exhausting, 
unwholesome labor would seem to be specially de- 
signed to undertake. 

As the complexity of productive methods has in- 
creased and the factory system has extended, an in- 
dustrial policy has gradually come into vogue, the evil 
social effects of which the employing class have no 
adequate conception. Nor is this a necessary feat- 
ure of the present industrial system, as is generally 
assumed. There is no economic or social reason why 
the use of improved methods of production should be 
inimical to social progress. Indeed, from the very 
nature of things, it should be the reverse. There is 
nothing in the division and concentration of labor and 
the use of machinery that necessarily involves the 
physical deterioration or moral and social degradation 



THE WAGES SYSTEM. 357 

of the laborer. Nor do we think it would be just 
to assert that conditions which lead to these results are 
due to special meanness on the part of the employing 
class. Employers, as a rule, would gladly do anything 
in their power to improve the condition of the labor- 
ing classes, if they only knew what to do without in- 
jury to themselves. If the present social evils were a 
necessary part of the wages system or of the natural 
depravity of the employing class, reform would be 
possible only by the entire overthrow of existing insti- 
tutions, and a radical change in human nature, which 
might fairly be regarded as a hopeless task. 

But, fortunately for civilization, such is not the 
case. The mere fact of working for wages does not 
necessarily involve either industrial hardship or social 
disadvantage. The laborer is not rich or poor by vir- 
tue of the particular means by which he obtains his 
wealth, but according to the amount of wealth he re- 
ceives. Wages, as already explained,* are simply 
stipulated, as distinguished from contingent incomes. 
When the laborer worked for himself, his income was 
contingent upon the immediate results of his labor. 
When he works for another, it is stipulated in advance. 
And there is nothing inherent in this economic relation 
to make the stipulated income less than the contin- 
gent. Indeed, it is under the regime of stipulated in- 
comes (wages) that the laboring classes — and all other 
classes — ■ have made their greatest progress. The 
stipulated income of the laborer to-day is many times 
greater than it was when it was contingent — i.e., when 
he worked for himself and owned all the product, f 



* See Chapter II., Part II., pp. 73, 74. 
f See Chapter I., Part I., pp. 19-21. 



358 WEALTH AND PROGRESS. 

Indeed, all industrial differentiation tends to the 
specialization of labor, and all specialization of labor 
tends to the stipulation of incomes. Accordingly, 
in the most civilized countries we find the largest per 
cent of wage and salary receivers, and uniformly the 
highest incomes. In short, there is nothing in the 
wages or stipulated income system, per se, to prevent 
wages from rising from five hundred to five thousand 
or to ten thousand dollars a year, any more than there 
was to prevent them from rising from fifty dollars a 
year in the fourteenth century to five hundred dollars 
at the present time. 

No ; the trouble is not due to any inherent principle 
in the existing industrial system or in human nature, 
but to mistaken conceptions of the law of economic re- 
lations. The employing classes have been taught to be- 
lieve that profit is the centre around which all economic 
and social interests revolve ; that the prosperity of the 
community depends upon that of the employing class ; 
" that profits rise as wages fall ;" * and therefore that 
the interests of the employing class — and hence of 
the whole community — are best promoted by keeping 
down wages. 

These inverted notions of economic movement, due 
mainly to a misconception of the law of wages, have 
naturally led to a mistaken and most uneconomic in- 
dustrial policy. Viewing the laborer simply as so 
much productive force — failing entirely to recognize 
his importance as a consumer — how to make labor 
cheap has been the important object. Accordingly, 
everything which tended to promote this object has 



* See Ricardo's Works, pp. 63-75 ; a l so Mill's " Political Econ- 
omy," Vol. II., p. 512. 



MISTAKEN INDUSTRIAL POLICY. 359 

been uniformly encouraged, and whatever seemed in- 
imical to it has been vigorously opposed by the em- 
ploying class. 

In pursuing this policy they have constantly endea- 
vored not only to give the laborer the minimum 
amount of wages, but also to procure the maximum 
amount of labor for it. To accomplish this, the work- 
ing day has invariably been made as long as possible, 
being in many cases twelve and thirteen, and in the 
Southern States and in many countries in Europe 
fourteen and fifteen hours a day, including women and 
children, and this very often under the most unwhole- 
some and degrading conditions. 

In proportion as the use of improved machinery is 
extended, and the specialization of labor is increased, 
does this labor become physically and nervously more 
exhausting ; and in proportion as this pressure in- 
creases, unless the working time is correspondingly re- 
duced, the laborer's susceptibility to the refining and 
elevating influences of his social environment is les- 
sened, and his leisure moments find him dull and in- 
different to all moral and political influences. 

The inevitable tendency of these conditions is to 
cause the laborer to gravitate toward the saloon rather 
than to the reading-room, lecture hall, museum, and 
theatre for his instruction and entertainment. Persons 
who have to be subject to such long hours of con- 
tinued toil from childhood, amid the foul air of mines 
and the sweltering heat and stifling atmosphere of 
mills and factories for a poor existence, cannot be ex- 
pected to develop the ambition and force of character 
necessary to inspire and elevate their domestic and 
social relations. 

And the effect of these conditions upon the women 



360 WEALTH AND PROGRESS. 

and children is even worse. The forcing of women, 
especially wives and mothers, into the factory, tends 
directly to sap the very source from whence the 
springs of character arise. Just in proportion as 
woman is transferred from the home to the workshop, 
is her inspiring and refining influence in the domestic 
circle destroyed ; and hence the social environment, 
and therefore the character of the children, the family, 
and ultimately that of the whole industrial community, 
is thereby lowered. 

The tendency of the modern industrial policy to 
thus limit the social opportunity of the masses is 
necessarily inimical to progress ; but in no country is 
its evil influence so dangerous as in this ; and while 
we, of all nations, can least afford to lower the social 
character of our laboring classes, we are more exposed 
than any other country in the world to the causes 
which naturally tend to produce that result. Nor do 
our common schools afford us any adequate protection 
against the evils to which we refer. It is true that our 
schools, to which all are freely admitted, afford a con- 
siderable degree of opportunity for intellectual and 
social development ; but a very large portion of the 
laboring class does not, except to a very slight extent, 
go through the schools. In the first place, a very large 
and increasing proportion of our laboring population, 
through industrial conditions over which they have no 
control, are practically outside the pale of our social 
and educational institutions. Were the laboring 
classes in this country wholly composed of our native 
population, reared under the influence of republican 
institutions, we might witness a different state of 
things. 

In this we are unlike any other country. One of the 



OUR FOREIGN' POPULATION. 361 

characteristic features of our phenomenal growth in 
wealth and population is that a large per cent of 
the laboring classes, and especially those employed 
in the industries where the worst conditions most 
prevail, are foreigners or born of foreign parents, whose 
social characters have been moulded by Old World con- 
ditions. To these the common school constitutes but 
a very small factor in their social environment. For 
the most part, those who are born in foreign countries 
do not reach our common schools at all. They go 
directly into our mines, factories,' and workshops, 
where, together with the tenement hovels and their 
surroundings, they spend their lives amid an industrial 
and social environment which is seldom very little 
better and sometimes even worse than that of the 
Old World. 

Nor does the common school form a much greater 
proportion of the environment at least of a very 
large per cent, of those born here of foreign parents. 
Indeed, it cannot reasonably be expected to be so. 
Parents into whose lives the refining and elevating in- 
fluence of education and social culture never entered 
cannot be expected to have any due appreciation of 
the importance of education for their children. 

The consequence is, as all investigation into the con- 
dition of the schooling and employment of working chil- 
dren shows, that through the indifference of the parents 
to the importance of education, and the need they 
have through their poverty for the few cents a day the 
little ones can obtain for working, combined with the 
insatiable desire of the employers to obtain cheap 
labor, children are forced into factories and work- 
shops at seven and eight years of age. Although in 

many states the law forbids the employment of chil- 
17 



362 WEALTH AND PROGRESS. 

dren under ten years of age, yet through the causes 
to which we have referred, aided by ignorance of our 
language, and the indifference of the authorities, it is 
flagrantly evaded by a wilful misrepresentation of the 
children's ages, in order to get them out of the school 
and into the workshop. This is done to an extent 
wholly incredible to those unacquainted with factory 
life and practices in this country. 

Indeed, the extent to which this occurs, even in 
New England, especially among the non-English- 
speaking operatives, is positively appalling. I have 
myself known parents who actually changed the ages 
of all their children in the register in their family 
Bible, dating their births uniformly two years earlier, 
in order to evade the law and get their children into 
the mill two years earlier ; and this solely for the sake 
of the twenty to twenty-five cents a day they would 
obtain by their labor in the factory. 

Manifestly, therefore, that portion of our laboring 
population which is of foreign birth or parentage 
may properly be regarded, for all general, social, and 
economic purposes, as outside the influence of our 
common schools. Hence, to the extent that our 
laboring classes are composed of persons of foreign 
birth or parentage are they, for the most part, de- 
prived of the social opportunities indispensable to the 
development of the mental, moral, and social character 
necessary to the safe citizenship of a republic. 

It is only necessary to realize the extent to which 
the wage-workers of this country are composed of per- 
sons of foreign birth or parentage, to show that the 
question of the social opportunities of the laboring 
classes is assuming a degree of social and political, as 
well as economic, importance which we cannot much 



OF FOREIGN BIRTH AND PARENTAGE. 363 

longer afford to ignore with safety to republican insti- 
tutions. 

Out of the 17,392,099 persons engaged in the vari- 
ous industries in 1880, 3,494,647 were born in foreign 
countries, 4,368,309 were born here of one or both 
foreign parents, and 3,474,344 were women and chil- 
dren under fifteen years of age. In other words, 45.20 
per cent of all who pursued gainful occupations were 
of foreign birth or parentage, and 19.98 per cent were 
women and children under fifteen years of age. 

If we examine the proportion in which these are dis- 
tributed among the various industries, the importance 
of the point to which we have referred will at once be 
apparent. Taking the ratio of persons born in this 
country having one or both parents of foreign birth 
as 1^ to 1, which is about the proportion they sustain 
to each other in the whole population, we shall find 
that, taking employers and employed together, the 
per cent of those engaged in the various occupations in 
1880 who were of foreign birth or parentage was as 
follows : 

All occupations 45 20 per cent. 

Agriculture 23.65 " 

Professional and personal service 55-°S " 

Trade and transportation 56.99 " 

Manufacturing, mining and mechanical 71.88 " 

If we leave out the profit, rent, and salary-receiving 
classes, and consider the question solely in relation to 
those who work for wages, the extent to which our in- 
dustrial classes are composed of persons of foreign 
birth or parentage will be more distinctly seen. Out 
of the 17,392,099 persons engaged in occupations for 
gain in this country in 1880, there were 10,547,814 
working exclusively for wages. These were distributed 



364 WEALTH AND PROGRESS. 

among the various industries as follows : Agricultur- 
al laborers, 3,323,876; domestic servants, 1,075,745; 
transportation, mercantile, and other industries, 2,374,- 
618 ; manufacturing, mining, and mechanical indus- 
tries, 3,773,575. 

in these industries persons of foreign birth or par- 
entage prevailed in about the following proportions : 
Agricultural laborers, 23.85 per cent ; domestic ser- 
vants, 54 per cent ; transportation, mercantile, and 
other industries, 67.33 per cent ; manufacturing, mer- 
cantile, and mining industries, 72.63 per cent. Taking 
fifty of the principal cities, over ninety-three per cent 
of those engaged in the last-named industries are of 
foreign birth or parentage. 

It will thus be seen that of the nearly seven million 
of laborers employed in productive industries, outside 
of agriculture, about seven out of every ten, and in 
fifty of the principal cities more than nine out of every 
ten, are of foreign birth or parentage. It should also 
be remembered that in these industries there is a 
large proportion of women and children. In 1880, in 
fifteen important manufacturing industries, including 
those of cotton, woollen, silk, carpets, hosiery, cloth- 
ing, tobacco, etc., 67.29 per cent of the employes were 
women and children under sixteen years of age.* 

In view of these facts, it is idle to talk of relying for 
the remedy of our social evils solely upon the influ- 
ence of our educational institutions, for the simple 
reason that, as we have seen, the great mass of our 
laboring population are, at least until the third gener- 
ation, practically outside the influence of these insti- 
tutions. 

* United States Census, i8So, volume on Manufactures, p. 34. 



NOT OPPOSED TO IMMIGRATION. 365 

It must not be inferred from this, however, that I 
am opposed to unaided immigration. I should just as 
soon think of opposing the use of improved methods 
of production. I refer to these facts, not to censure 
the emigrant or to prevent his immigration, but that 
we may not lose sight of the true nature of our indus- 
trial and social conditions, and in order that we may 
more fully realize the quality of the social material out 
of which, as economists and statesmen, we are called 
upon to make suitable citizens for a progressive re- 
public. 

The poverty consequent upon the low industrial 
and social conditions of Europe has sent millions of 
her people here to make for themselves homes. They 
have not come here as beggars, but as producers in 
search of an opportunity to procure for themselves 
and their families a living, and to improve their social 
condition, which privilege was denied them at home. 
They have ploughed our prairies, dug our mines, built 
our furnaces, forges and factories, and covered this 
continent with a network of highways for travel, trans- 
portation, and communication, the like of which the 
world has never seen before. They have given wealth 
and power to us, and it is our duty to create social 
opportunity for them. This is not only our duty to 
them, but it is an imperative necessity — the only 
means of social and political protection to ourselves. 

In this regard we have been very negligent. We 
have vainly endeavored to both " eat our cake and 
keep it." Having adopted the European industrial 
policy, born of a one-eyed political economy, which 
sees the laborer as a factor in production, but not as a 
factor in consumption — as the preponderating element 
in the general market — we have made as much of 



2,66 WEALTH AND PROGRESS. 

him as possible as a producer, and as little as possi- 
ble of him as a consumer. Under our spread-eagle 
offering of " an asylum for the oppressed of all 
lands," we have not only extended a general invi- 
tation to the laborers of all countries to come among 
us, but we have taken special pains to approach the 
poorest, and hence socially the weakest and least char- 
acterful, portion of the laboring classes in Europe and 
Asia. We have held out startling, and often delusive, 
inducements for them to come here, sometimes ac- 
tually importing them as industrial chattel. 

By this means, instead of obtaining the most ad- 
vanced and intelligent element, which unaided emi- 
gration would naturally bring, we have obtained the 
most ignorant and incompetent portion of the social 
product of European and Asiatic countries. 

Indeed, this class has, for the most part, been pre- 
ferred, because, through the perverted economic esti- 
mate of the laborer already referred to, they have been 
regarded as being cheap, which was the only reason 
for importing them. Then, instead of surrounding 
them with the best social conditions possible, we 
have forced them into the very worst that the consen- 
sus of the community would tolerate. We have turned 
them into our factories, mines, and workshops almost 
without regard to age, sex, or even sanitary conditions. 
We have put them in contact with the most im- 
proved . and high-speed machinery eleven, twelve, 
and sometimes more hours a day, thereby putting 
them under greater physical and nervous strain than 
they were used to in some of the countries of the Old 
World. And we have at the same time crowded them 
into unwholesome hovels, the social influence of which 
is of the same degrading character. 



THE TRUCK SYSTEM. 367 

The pest-breeding and morally degrading conditions 
of the homes and the social life of the great mass of 
the laboring population in our industrial centres almost 
beggars description. 

I have long been convinced that if their true con- 
dition was fully realized by the great intelligent middle 
class, they would not long be permitted to be used 
for human habitation. It is a common thing in the 
manufacturing centres, even in the Eastern States, 
to find a large per cent of the laborers practically in 
a state of pawn to the corporation for which they 
work. The tenements in which they live, the store at 
which they trade, as well as the factory in which they 
work, are all, directly or indirectly, in the hands of 
the employer. 

By this means the store-book and the pay-roll are 
made to keep pace with each other, and a large per 
cent of the laborers scarcely ever receive a dollar in 
money, often being permanently in debt to the cor- 
poration, for which the latter holds a mortgage on 
their household effects. Thus the laborers are teth- 
ered to the spot, unless they go forth as tramps, leav- 
ing their little furniture behind them, or, as is com- 
monly the case, steal away in the night.* 

* Of this I can speak of my own knowledge. During the spring 
and summer of 1875 and the winter of 1875-76 I had occasion to 
visit nearly all the factory towns and cities in New England, except 
Vermont. I found the " truck system" was the general rule, espe- 
cially in the smaller towns. In the spring of 1875 a strike took place in 
Taftville, which was regarded as one of the best factory villages in 
Connecticut. I was sent there from Fall River as a representative of 
the United States Cotton Operatives Association, of which Taftville 
was a branch, to investigate the case and endeavor to settle the dis- 
pute. I found a large number of families who had never been out of 
debt to the company since they went to the place, and a still larger 



368 WEALTH AND PROGRESS. 

The tenements in which the operatives are housed 
are such as to make physical health and moral charac- 
ter almost impossible. They are generally owned by 
the corporation and built near the work, without re- 
gard to the sanitary condition of the surroundings. 
Frequently from six to ten or more families are crowded 
into one building, with but one entrance, and not even 
having a back door or anything approaching modern 
conveniences. Often these tenements have but one 
privy to a whole house of many families, consisting of 
from thirty to fifty persons. 

My vocabulary is wholly inadequate to describe the 
condition of the tenement-houses I have seen in the 
factory centres in New England. A faint conception, 
however, of the condition of the houses of the labor- 
ing classes may be drawn from the following official 
statement in reference to the laborers' homes in 
Massachusetts, the most advanced State in the Union : 

In the cities and manufacturing towns," says the 
report,* " the herding together of tenants in large 
numbers and narrow limits has become wofully prev- 
alent. In a single building, in the town of W — ■, thirty- 
number who for months together never drew a penny of money for 
wages. Even rent for a seat in the church was collected in the mill 
office. Being unable to agree upon any settlement of the dispute, the 
operatives decided to leave the place and go to work elsewhere. Al- 
though the union was ready to pay all the expenses of their moving, a 
large portion of them were compelled to stay or lose all their furni- 
ture, this being in pawn to the corporation store. See Report of 
Massachusetts Bureau of Statistics of Labor, 1871, pp. 467, 46S ; also 
ibid., pp. 434-438 ; also Report for 1S72, pp. 409-421. Compare 
Report of Labor Bureau of New Jersey. 1882, pp. 6-8 ; ibid., 1883, 
p. 126. 

* Report of the Massachusetts Bureau of Statistics of Labor for 
1874, pp. 33, 34. See also ibid., 1873, p. 379 ; ibid., 1872, pp. 442, 
443 ; ibid., 1871, pp. 521-528. 



PEST-BREEDING HOMES. 369 

two feet long, twenty feet wide, three stories high, with 
attics, there habitually exist thirty-nine people of all 
ages. For their use there is one pump and one privy 
within twenty feet of each other, with the several sink- 
spouts discharging upon the ground near by. The 
windows are without weights, and the upper sashes are 
immovable. No other provision is made for fresh air. 
Scores of similar overcrowded and uncleanly tenements 
exist and could be cited. It is well attested," con- 
tinues the report, " that there commonly exist, in 
connection with the homes of the laboring classes 
everywhere, filthy and insufficient privies, with over- 
flowing vaults, unhinged doors, and rotten floors ; cess- 
pools, sink-drains, and sewers, broken or surcharged, 
the foul discharges permeating the soil in the immedi- 
ate vicinity of wells and cisterns ; cellars, where damp- 
ness and decay are doing a constant work of death, 
and yet are often inhabited, enclosures made pestilential 
by the causes mentioned, and pig-pens and garbage- 
tubs ; while stairs and passage-ways are carpeted and 
draped with dirt of every nature." 

The statements made by the Labor Bureau are fully 
sustained by the investigations of the Boards of Health 
and Education, as a most superficial glance at their 
reports will show.* 

Nor is Massachusetts referred to because her labor> 
ers are worse housed than those of other States. On 
the contrary, they are, on the whole, socially better 
conditioned than the same class in any other State. 
Indeed, it is for this reason that industrial and social 

* See Fourth Report of State Board of Health, p. 396 ; Fifth Re- 
port of Board of Health and Works of Local Boards ; Report of State 
Board of Health for 1872-73. Also Report of Registration, 1870, 
p. 63. 



370 WEALTH AND PROGRESS. 

investigations have been more thorough, and, conse- 
quently, reliable data is more abundant there than 
elsewhere. She was the first to have a Labor Bureau, 
and its investigations have been more exhaustive and 
scientific than those of any other, perhaps, in the 
world ; and she has enacted more industrial legislation 
than any other State. 

Since the Massachusetts Bureau was instituted, in 
1869, fifteen other States have followed suit, and a 
National Labor Bureau has also been organized, and, 
so far as their investigations have been at all compre- 
hensive, their reports reveal the social condition of the 
laboring classes to be as bad, and, in many States, 
worse to-day than they were in Massachusetts ten 
years ago.* 

Moreover, it should be observed that these abomi- 
nable tenements in which the laboring classes are 
housed, for the most part, at least, outside of the very 
large cities, are owned by the corporations, and the 
laborers are compelled to occupy them, on the cor- 
poration's terms, as a condition of employment. Even 
in so large a city as Fall River, Mass., I have seen 
operatives discharged for refusing to live in corpora- 
tion tenements, because they were inferior to those they 
were occupying. 

If we turn to the large cities, we find that, in many 
respects, the case is even worse. While the truck sys- 
tem, for obvious reasons, does not obtain in the large 
cities, the tendency to crowd the masses into small, 

* See Second Report of Bureau of Labor of New York, 1885, pp. 
154. 155, 277-286 ; also Maryland, 1885, p. 61 ; also Michigan, 
1885, p. 262 ; also the Report of the Tenement-House Commission 
of 1885, city of New York, the Annual Report of the Board of Health 
for the city of Baltimore, etc. 



CITY TENEMENT-HOUSES. 37 1 

unwholesome dens, where the causes which tend to 
prevent the development of their social character 
wholly neutralize the civilizing influences of city life, 
is appallingly manifest. In New York City alone there 
are thousands of families, consisting of from four to 
ten and twelve persons to a family, eating, sleeping, 
and working in apartments of one and two rooms, 
which, according to the official statements, are in an 
indescribably filthy, pest-breeding condition.* 

Some idea of the alarming extent to which these 
conditions prevail may be conceived when it is known 
that in New York City there are over eight hundred 
and ninety-seven thousand nine hundred persons liv- 
ing in these tenement-houses, and more than one 
hundred and seventy-five thousand five hundred 
families existing in apartments of only three rooms 
each.f Nor is this state of things confined to New 
York City, but, unfortunately, it is proportionately 
prevalent in all the large cities. In Baltimore, for exam- 
ple, according to the latest returns,^: there are four 
thousand one hundred and twenty-two families that 
live in houses or apartments consisting, on the aver- 
age, of only two and one sixth rooms to a family. 

The inevitable effect of such conditions is too obvi- 



* See account of cigar-making in tenement-houses in the Report of 
the Bureau of Statistics of Labor, New York, 1884, pp. 143-182 ; also 
Report of the Council of Hygiene, pp. 8, 9, 41, 7S, 84, 216, 217, 279, 
280, 349 ; also Report of Tenement-House Commission, 1885, pp. 26, 
27, 28, 29, 43, 44. 50, 51, 52, 84, 85, 86, 87, etc. 

f This is based upon the investigations of the Tenement-House 
Survey, made by special corps, under the direction of the Sanitary 
Bureau, in 1879, a °d the unpublished data obtained by that bureau 
down to September ist, 1886. This is further sustained by the re- 
turns given in the United States Census for 1880. 

% Annual Report of the Board of Health for 1884. 



372 WEALTH AND PROGRESS. 

ous to need stating. To expect anything better than 
social depravity from such influences is to expect a 
miracle. It may be said that we give the foreigner 
the ballot, which he did not enjoy in the Old World. 
True, but in so doing, without at the same time fur- 
nishing the opportunities necessary to develop the in- 
telligence with which to direct its use, we have simply 
inflated his conscious importance as a social factor, 
without improving the quality of his social character. 
In this way we have supplied an abundance of accessible 
and cheap material for political and social corruption, 
which, it is needless to say, is being freely utilized. 
Forgetting that the most fatal danger to republican 
institutions is the ballot in the hands of the poor and 
ignorant masses, we have, in our economic blindness, 
largely fulfilled Macaulay's prophecy, and within our 
midst we are permitting, if not promoting, the devel- 
opment of the " Huns and Vandals," which, though 
unconsciously, none the less surely threaten the very 
life of the republic. 

Nor is this taking an unduly pessimistic view of the 
situation. The dangers to which we, more than any 
other people, are exposed from this source are alarm- 
ingly manifest in the marked lack of political integrity 
and industrial and social safety that prevails. If we 
pause for a moment and consider where anarchy, and the 
use of dynamite, and other physical-force methods for 
reforming social evils are the most in general use ; 
where the lack of confidence and even pronounced dis- 
trust between social classes is most prevalent ; where 
the enmity of the laborers to the successful classes is 
most fierce and outspoken ; where the hatred of and 
opposition to established authority is most bitter, per- 
sistent, and general, and where all forms of political 



POVERTY MAKES CHEAP VOTERS. 373 

corruption— the buying of votes, the selling of char- 
ters, the packing of caucuses, the trading of offices, 
from the presidency down — are the most constant, we 
shall find that it is in the large cities and industrial 
centres. It is in these very centres where, as we have 
seen, the greatest proportion of foreigners exist under 
the degrading influences of our infamous tenement- 
house and factory life ; where poverty, ignorance, and 
vice furnish abundant conditions for low social charac- 
ter, and supply the most inflammatory material for 
revolution, and the strongest excuse for despotism. 

The existence of these evils is painfully recognized, 
but not so the causes from which they arise and 
the means by which they can be eliminated. We 
have observed the fact that the advocates of anarchy, 
dynamite, and other forceful methods of social disrup- 
tion, with their ignorant, impulsive, and misguided fol- 
lowers, are mainly persons of foreign birth and charac- 
teristics. We have seen that while the foreign-born 
element constitutes only about fourteen per cent of 
our total population, it furnishes over thirty per cent 
of our drunkenness and crime, and a still greater per 
cent of the corruptible material in politics. But while 
we have developed a keen perception of these facts, 
we have shown an utter incapacity to recognize the 
obvious causes which have produced them. Instead 
of endeavoring to ascertain and remove the influences 
which promote this social disease — the influences 
which prevent the development of the mental, moral, 
and social character — we have, for the most part, 
been content with denouncing the victims, and devis- 
ing, for remedies, measures which tend to their further 
social degradation. 

Among the measures which have been offered, many 



374 WEALTH AND PROGRESS. 

of which have been adopted, are propositions for limit- 
ing immigration, imposing property, educational, and 
other qualifications for voting ; lengthening the terms 
and increasing the appointing power of executive offi- 
cers ; making popular elections less frequent ; taking the 
expenditure of public moneys out of the hands of popu- 
lar elective bodies, and putting it into those of ap- 
pointed commissioners ; taking public offices out of the 
reach of politics, etc. Not one of these measures has 
the slightest causative relation to the social malady for 
which they are proposed as remedies. Notwithstand- 
ing the fact that they have emanated from the journal- 
ism and colleges of the cultured classes, they are en- 
titled to be denounced as the merest political quackery. 

After having been to Europe and Asia and induced 
the poorest and, therefore, the lowest class of laborers 
to come to this country, and then turn them into the 
mills, mines, and factories to work as hard and as long as 
their physical energies can endure ; crowding them 
together in unwholesome tenements, in contrast to 
which the modern rumshop is a refining luxury ; then 
to denounce them for their lack of intellectual, moral, 
and social character, is simply to condemn them for 
not being what we have made it practically impossible 
for them to be. 

Nor would a property or educational qualification 
for voting in any way tend to remedy the evil. It might 
disfranchise the poor and ignorant, but it would in no 
way tend to increase their wealth or intelligence. 
Thus, having blindly prevented the social development 
of the masses, their incapacity is made the excuse for 
their disfranchisement, and, under the pretence of 
saving civilization, liberty is being destroyed. 

The same is true of all attempts to improve our 



TREASON TO THE REPUBLIC. 375 

social conditions by lengthening the terms of public 
offices, increasing the appointing power of executive 
officers, reducing the frequency of popular elections, 
etc. Instead of developing the character of the masses 
up to the level of sustaining our democratic institu- 
tions, these measures are attempts to whittle away our 
democratic institutions, in order to sustain our blind 
and pernicious industrial policy. As such measures 
do not affect the cause of the evil, each step in that 
direction only tends to make the next more necessary 
and the ultimate reign of despotism more certain. 

Such miscalled statesmanship, whether consciously 
vicious or ignorantly blind, is the veriest high treason, 
not only to the republic here, but to human freedom 
everywhere. Social degradation is not peculiar to 
nationality, but to character ; and if the character of 
the foreign element in our population is lower than 
that of the native American, it is for no other reason 
than that their social environment has been viler. 

The social crisis, especially in this country, is in- 
creasing in gravity every day. Like all neglected 
economic questions, it is rapidly assuming a social and 
political aspect ; and unless we abandon our present 
undemocratic and uneconomic policy of superficial 
tinkering with our political institutions, to evade the 
effects of a mistaken industrial policy, and approach 
the subject on the plane of broad social principles, we 
shall ere long find ourselves in the terrible dilemma 
against which Macaulay warned us, of being compelled 
to choose between " civilization and liberty." Social 
degradation and democracy are incompatible. Either 
the social character of the masses must be elevated to the 
level of that of the political institutions, or no power on 
earth can prevent the character of the latter from falling 



376 WEALTH AND PROGRESS. 

to that of the former. This is the verdict of universal 
social law, from which there is no appeal. 

The question, therefore, that most urgently demands 
the attention of the true statesman to-day, beside 
which all schemes for mere administrative reform are 
incomparably insignificant, is that of increasing the 
opportunities for elevating the social character of the 
masses. Give us this condition, and all else will be 
vouchsafed. With a high state of social culture 
among the people, wise and safe reform of existing 
institutions would be guaranteed. Vote-buying and 
ballot-box-stuffing, with their numerous phases of 
political chicanery, would then be impossible, and 
hence the many undemocratic schemes for the purifi- 
cation of politics, by removing the government further 
from the people, which are so assiduously urged by 
gilt-edged reformers, would become obviously inex- 
cusable. 

Such questions as tariff, finance, taxation, etc., 
would then be intelligently considered by the masses 
and scientifically settled by their chosen representa- 
tives, instead of being manipulated by superficial poli- 
ticians, as is always the case with an ignorant and inca- 
pable voting constituency. Then the empty eloquence 
of earnest but ill-informed enthusiasts, who substitute 
their assumed knowledge of God's intentions for that 
of economic law, would exercise a less dangerous in- 
fluence over the masses. The various socialistic propo- 
sitions for revolutionizing existing institutions would 
also be estimated nearer their true social worth, and 
their final adoption or rejection would be determined 
by the intelligent judgment of the masses, rather than 
by the sympathetic eloquence and magnetic personal 
influence of a few individual leaders. The power of 



LESS HOURS INDISPENSABLE. 377 

personal leadership always diminishes as the general 
intelligence of the masses increases. 

Manifestly, therefore, in view of the cosmopolitan 
character of our population, the increasing complexity 
of our industrial methods, and the democratic charac- 
ter of our public institutions, the maintenance of the 
influence and integrity of the republic makes the in- 
creased social opportunities of the masses — which a re- 
duction of the hours of labor and half time schools 
alone can adequately supply — not only an economic, 
but also an imperative social and political necessity. 



SUMMARY AND CONCLUSION. 



In the foregoing pages we have taken particular 
pains to avoid all appeals to sympathy or sentiment. 
We have asked the reader to take nothing for granted, 
but have endeavored to establish inductively every 
foot of the ground we occupy. 

The principles established and propositions presented 
in this volume may be briefly summarized as follows : 

First. That the natural order of social progress is 
from the material to the social, intellectual, and moral, 
making economics the basis of ethics, and not ethics 
the basis of economics. In short, that the industrial 
condition of the masses is the subsoil for all social, 
political, and moral institutions. That poverty, igno- 
rance, and vice give despotism, while wealth, intel- 
ligence, and morality give freedom. Therefore, social 
progress depends upon improving the material condi- 
tions of the masses. 

Second. That the wealth of the laboring classes can- 
not be increased by lessening that of any other class, 
nor by any method of redistribution whatsoever, but 
only by increasing the aggregate wealth produced. 
That no distribution of wealth can be equitable or 
economic which does not take place as an inseparable 
part of the process of production. 

Third. That the only way of increasing the income 



SUMMARY AND CONCLUSION. 379 

and improving the material conditions of the laboring 
classes is through a natural and permanent advance 
of real wages. 

Fourth. That a natural rise of wages does not tend 
to increase prices, diminish profits, or to reduce 
rents. 

Fifth. That the rate of wages is not governed by 
supply and demand, nor by the amount or value of 
the product, nor by the skill of the laborer or the 
caprice of the employer, but that the price of labor is 
governed by the same economic law as that of every- 
thing else which is subject to the conditions of ex- 
change — viz., the cost of production. 

Sixth. That the cost of producing labor is governed 
by the standard of the laborer's living. In other 
words, the standard of living is the lazv of wages. 

Seventh. That the standard of living is determined 
by the social character of the people. Thus wages, 
like social and political institutions, finally depend 
upon the social character of the masses. 

Eighth. That the character of any people or class is 
mainly determined by the social environment, being 
low or high in proportion to the simplicity or com- 
plexity of their social relations — i.e., according to the 
extent of their social opportunities. Hence, social op- 
portunity, or, in other words, contact with an increas- 
ing variety of social influences, is the natural founda- 
tion for all industrial, political, and moral reform. 
Therefore, no proposed change can, in any permanent 
sense, improve the material and moral well-being of 
the masses which does not tend to increase their social 
opportunities. 

Ninth. That under wage-conditions, and especially 
under the factory system, the most, if not the only, 



380 WEALTH AND PROGRESS. 

feasible means for enlarging the social opportunities 
of the masses is a general reduction of the hours of labor. 

Tenth. That this can be effectually accomplished by 
the general adoption of two simple propositions : 

(1) A uniform eight-hour system and (2) a half- 
time school system for all working children under six- 
teen years of age. 

We do not present these propositions as a panacea 
for all the ills known to society, but we present them 
as the natural and necessary first step toward increas- 
ing the wants, developing the character, and advanc- 
ing the wages of the laboring classes, and by this 
means lay the natural economic and social foundation 
for permanently sustaining democratic institutions 
here and promoting the progress of social and polit- 
ical freedom everywhere. 

In saying this, we do not underrate the importance 
of reforming our system of finance, taxation, civil 
service, etc. All such reforms, however, are of a 
secondary character, because they do not sustain any 
fundamental relation to the influences which directly 
impel social progress. They are administrative rather 
than creative in their character. They relate only to 
the wise adjustment and regulation of the wealth, in- 
stitutions, and social relations that now exist, and not 
to the development or the creation of new. The 
existing wealth might be as equally or as equitably 
distributed among all classes as the most ideal Commun- 
ist could desire ; and the money system, the taxation 
system, the land system, the judiciary system, rail- 
road, telegraph, postal, and civil service systems might 
be absolutely perfect without materially changing the 
economic and social condition of the masses. None 
of these things, were they possible, would increase 



SUMMARY AND CONCLUSION. 381 

the general production of wealth, increase the wages, 
or raise the social state of the masses. 

But however important these reforms may be, they 
are impossible until the industrial conditions and social 
character of the masses are elevated. Public honor 
and capable and wise administration of affairs are im- 
possible, especially under democratic institutions, 
without a high level of general intelligence and char- 
acter among the great mass by whom the legislative 
and executive officers are to be elected and sustained. 
Therefore the greater the importance of these reforms, 
the more imperative becomes the necessity for increas- 
ing the opportunities for developing the social charac- 
ter of the masses upon which they depend. 

The true philosophic policy for the wage-receiving 
classes to pursue is not to form new political parties 
with long platforms and many platitudes, but to con- 
centrate all their political and social influence upon 
the single issue of securing a general reduction of the 
hours of labor. 

Nor should the movement be limited to any indus- 
try, or state, or to this country ; it should be purely 
social in its character and international in its opera- 
tions. 

Such a movement, based upon the principles of 
sound economic philosophy and broad, comprehen- 
sive statesmanship, should receive the hearty co^ 
operation and support not only of workingmen, but 
of statesmen, moralists, philanthropists, and social 
reformers of all kinds whatsoever, and, above all, it 
should receive the support of the emplo}'ing class. 
If an eight-hour system for adults and half-time sys- 
tem for all working children under sixteen years oi 
age could be uniformly adopted in this country, Eng- 



382 WEALTH AND PROGRESS. 

land, France, Germany, Belgium, and Switzerland, 
its effect upon emigration, enforced idleness, business 
depressions, and upon real wages, together with the 
growth of intelligence and social character, would in 
twenty-five years change the face of the industrial 
and social institutions of Christendom. 



INDEX TO "WEALTH AND PROGRESS." 



"Black Death," the, its bearing on 
the wages-fund theory, 51 ; not the 
cause of rise of wages, 121-124 

Brassey, 86, 102, 164 



Cairnes, 39, 41, 42, 43, 47 

Capital, it is not stored-up labor, 17 ; 
it is the creator of wealth, 17-22 ; 
how it becomes a factor in produc- 
tion, 25 ; not due to abstinence, 23, 
28, 29 ; is not the measure of wages, 

Children, education of, 341 ; propor- 
tion of, in industry, 364 

Consumption determines wages and 
production, 58 

Cost of living, what it depends upon, 
96 ; determines wages, 98 ; charac- 
teristics of, in India and China, 
104 ; also in England, 105-107 ; 
determines nominal wages, 115 ; by 
what causes affected, 162 ; in dif- 
ferent countries, 165 

Cotton cloth, capital invested in, per 
operative, 25, 26 

Crime, decrease of, since 1850, 319 ; 
in England and America, 353 

D 

Distribution, natural order of, 59 
E 

Eight-hour system, its effect upon 
wages, 251-259; its economic ef- 
fects, 259-261 ; its bearing upon 
idleness and upon consumption and 
production, 265 ; its relation to 
profits, 266-272 ; its effect on rent, 
274-284 ; social and political ne- 
cessity of, 355-377 

Employers, cause of their opposition, 
241 ; duty of, 273 ; their mistaken 
industrial policy, 359 



Factory legislation, its history in Eng- 
land, 285-303 ; its effect in England, 
304-311 

Family income, of, not increased by 
wages of wife and children, 167-175 

Famines, phenomena of , 110-116, 120 

Fawcett, 44 

Free towns and cities, their relation 
to industrial evolution, 116-119, 
141, 142. (See also Index to " Prin- 
ciples of Social Economics.") 

Freedom, real nature of, 205 



G 



George, Henry, 60—68, 70, 90, 275, 

276 
Giffen, Robert, 313, 315 
Guizot, 118 



II 



Hallam, 107 

Hanseatic confederacy, the, its effect 
on English commerce, 125 

Hours of labor, effect of reducing, 
240—243 ; principle which should 
govern reduction of, 243 ; applica- 
tion of this principle, 249 



Idleness, not incompatible with an in- 
crease of wages, 113 ; effect of en- 
forced, 237 ; cause of enforced, its 
relation to leisure, 239 ; how affected 
by an eight-hour system, 265 

Increasing returns, what is meant by, 
25 ; how secured, 27 

Industrial depressions, 345 

Interest, its relation to wages, 212. 
(See also Index to "Principles of 
Social Economics.") 



384 



INDEX. 



J 

Jevons, Professor, 310 

L 

Labor, not the creator of all wealth, 
22 ; its relation to the production 
of wealth, 77 ; its price, how deter- 
mined, 79 ; the cost of, to the la- 
borer, 84. (See also Index to "Prin- 
ciples of Social Economics.") 

Laborer, the, his condition under 
slavery and under wage-conditions, 
78 ; his condition in India, 86, 102 ; 
his condition in China, 102, 103 ; 
legislation in regard to, 128-139 ; 
his condition in England, 143, 149— 
161 ; his condition in the United 
States, in Europe, and in the East, 
162-167, 177- (See also Index to 
" Principles of Social Economics.") 



M 



Machinery, improvements in, how 
determined, 23, 24, 25 ; its relation 
to high wages, 30 ; its relation to 
wealth, 33 

Marx, Karl, 15, 275, 276, 342 

McCulloch, 34, 165 

Mill, 34, 39, 42, 43, 50, 155, 168, 266, 
267, 310 

Mulhall, 314, 335-337, 347, 343 



O 



Opportunity, social, the measure of 
civilization, 203, 204 ; its definition, 
231 ; determines character of a 
people, 379 



Perry, 36, 44 

Piece-work, wages under, 179-186 

Population, foreign, 361 

Poverty, how diminished, 34 ; not due 
to distribution, 228 ; the remedy for, 
229 ; not due to wealth of rich, 275 ; 
decrease in, 323 ; makes cheap vo- 
ters, 373 _ 

Prices, their law, 79-83 ; their re- 
lation to standard of living, effect of 
their sudden rise or fall on nominal 
wages, 97 ; table of, 152 ; of wheat, 
156; trades-union prices, 164; for 
piece-work, 181-186 ; fall of a cri- 



terion of social progress, 311 ; in 
various countries, 333 ; in the United 
States, 347 

Production, improved methods of, de- 
pend upon increased consumption, 
28 ; its evolution, 33 ; is detsncined 
by consumption, 58 

Profit, does not come out of wages, 
56. (See also Index to '' Principles 
of Social Economics.") 

Progress, industrial, the cause not the 
result of political freedom, 205-211 ; 
comparison of, in various countries 
since 1850, 329 

Progress, social, shown by rise of 
wages, fall of prices in England, 
311-325 ; in America, 325-328 

R 

Rent, Walker's view of, 55 ; its bear- 
ing on wages, 63 ; for agricultural 
purposes, 65 ; to reduce it would 
not increase wages, 212 ; how af- 
fected by an eight-hour system, 
274-284 ; a rise of, implies a rise of 
wages, 279. (See also Index to 
" Principles of Social Economics.") 

Rogers, Thorold, 107, 112, 121, 123, 
124, 130, 137, 148, 151, 154, 163 



Smith, Adam, 34, 103 

Social reform, in relation to women, 
207, 208 ; to drunkenness, 209 ; 
not secured by arbitrary abolition or 
manipulation of rent, profits, inter- 
est, taxes, etc., 211 ; socialistic at- 
tempts at, are inadequate, 214 ; 
profit-sharing will not secure it, 
219 ; nor distributive co-operation, 
221 ; trades-unions come nearer to 
securing it, 227 ; produced by 
greater aggregate amount of wealth 
per capita, 229 ; true basis of, 233 ; 
first condition of, 234 

Standard of living, its determining 
influence on wages, 89, 96, 120; 
determines real wages, 115 ; its re- 
lation to cost of living, 127, 159 ; 
how determined, 187-190 ; social 
wants, how determined, 190—195 ; 
influences which determine social 
character, 195-204 

Strikes, their origin traced to theory 
of demand and supply, 38 

Summary and conclusion, 378-382 



WEALTH AND PROGRESS. 



385 



Taxes, their relation to wages, 212 
Tenement-houses, their condition in 

cities, 371 
Thornton, 39, 40 
Truck system, the, 367 



V 



Value, the nature of, 73, 79 

W 

Wages, their relation to production, 
9 ; how affected by capital, 21 ; 
their relation to prices, 27 ; to ma- 
chinery, 30 ; arbitrary rise of, im- 
possible, 31 ; their relation to profits, 
32 ; their rise the basis of progress, 
34 ; how affected by wages-fund 
theory, 35-52 ; Walker's theory of, 
53-59 ; Henry George's theory of, 
60-70 ; definition of, 71-73 ; real 
and nominal, 74, 75 ; the economic 
law of, 76-87 ; arbitrary and eco- 



nomic, 87 ; true theory of, 89 ; 
fixed by dearest class, 93 ; represent 
standard of living, 88-95 ; relation 
to cost of living, 96-98 ; similarity 
of, in 13th century, 100-109 '< rise of, 
in 14th century, 1 10-130 ; arrested 
in 15th century, 132-144; move- 
ment of, from 15th to 19th century, 
145-160 ; universality of law of, 
162-178 ; under piece-work, 179- 
186 ; ultimate analysis of law of, 
187-203. (See also Index to " Prin- 
ciples of Social Economics.") 

Wages-fund, its statement, fallacy, 
and inadequacy, 35-52 

Walker, Francis A., 53-59, 62 

Wants, how effected by social con- 
dition, 120; they determine the 
standard of living, 187 ; their rela- 
tion to wages, 176, 177 ; how cre- 
ated, 201 ; their basis, 202 

Wealth, prevalent notions about, 1 ; 
condition of man before the accumu- 
lation of wealth began, 2 

Women, wages of, 168, 172-174) 
their economic condition, 207 



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